1980s Banking Deregulation
About 1980s Banking Deregulation
The Depository Institutions Deregulation and Monetary Control Act of 1980 deregulated the US banking industry. It eliminated interest rate caps on deposits, allowed savings and loans to make commercial loans, and expanded the Federal Reseds authority over all depository institutions. The Garn-St Germain Act of 1982 further loosened restrictions. Deregulation contributed to the savings and loan crisis, which cost taxpayers 132 billion. It also led to banking consolidation. The number of US banks fell from over 14,000 in 1980 to under 5,000 by 2020. Deregulation proponents argued it increased competition and efficiency. Critics argued it sacrificed stability for innovation and enabled excessive risk taking.
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