New York City museum’s new exhibit about commercial banking shows some of its similarities to the history of hedge funds
The Museum of the City of New York on Tuesday unveiled “Capital of Capital: New York City Banks and the Creation of a Global Economy.”
It shows that the first U.S. bank, The Bank of New York, was created in 1784 and how banks over time were subjected to regulations much like hedge funds.
During a walking tour of the exhibit, the museum’s deputy director and chief curator Sarah Henry explained that President Franklin Roosevelt signed the Banking Act of 1933, “which limited the investment activities of commercial banks.”
The exhibit also included various advertisements created by banks after World War II to dress up their image, “when it wasn’t looked down upon to do so.”
This aspect correlates to the JOBS Act recently signed by President Barack Obama, which would allow hedge funds to market more freely to potential investors once changes in the legislation are finalized by the Securities and Exchange Commission in July.
Around the same time of the Banking Act, the Securities Act of 1933 was passed and that contained the stipulation restricting hedge funds and other private funds to marketing themselves to only a small group of ultra-wealthy investors with whom they already have a relationship, as marketing on a larger scale is considered solicitation.
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