Which act created a new system of federally chartered banks known as National Banks?

The National Banking Act of 1863 established a system of federally chartered banks, known as National Banks, in the United States. This act aimed to create a uniform national currency and enhance the stability of the banking system. By allowing banks to be chartered at the federal level and requiring them to hold a certain amount of U.S. government bonds as backing for their issued currency, the act sought to address issues of bank solvency and counter the proliferation of state-chartered banks, which operated under varying regulations and often issued their own currencies. This framework not only helped to centralize banking under federal oversight but also played a significant role in modernizing and ensuring the reliability of the banking system in the U.S.

In contrast, the Federal Reserve Act established the Federal Reserve System, which serves as the central bank of the United States, and does not create National Banks. The Dodd-Frank Act aimed to reform financial regulation in the wake of the 2008 financial crisis and does not pertain to the establishment of National Banks. The Glass-Steagall Act focused on separating commercial banking from investment banking and was not responsible for creating a system of national banks either.