ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Wildcat banking refers to the banking industry in parts of the United States from 1837 to 1865, when banks were established in remote and inaccessible locations. During this period, banks were chartered by state law without any federal oversight.

Detailed explanation-2: -WILDCAT MONEY was currency issued by wildcat banks during the nineteenth century, particularly during the period 1830–1860. Wildcat banks earned their name by locating their main offices in remote places where it would be difficult for noteholders to present notes for payment.

Detailed explanation-3: -The conventional explanation for why this happened is fraud. Little government intervention is said to have en-couraged dishonest bankers to form wildcat banks. These were banks formed only to defraud the public by issuing notes they would never redeem in specie (gold or silver).

Detailed explanation-4: -The National Banking Acts of 1863, 1864, and 1865 are a significant movement in that direction. With the demise of the Second Bank of the United States in 1837, only state-chartered banks exist.

Detailed explanation-5: -In the era of wildcat banking, all banks were state banks. They issued their own bank notes and were sometimes located in remote areas to discourage people from redeeming from their bank notes.