Banking and Commerce: To Mix or Not to Mix?
In the late 1970s, commercial banks and thrifts experienced an unprecedented diversion of their funds to less regulated institutions. Partly in reaction to this massive outflow of depositories’ funds, the U.S. Congress passed two separate, fairly comprehensive deregulatory measures-the Depository Institutions Deregulation and Monetary Control Act of 1980 and the Garn- St Germain Depository Institutions Act of 1982. Because of these two acts, banks and thrift institutions can more freely pay whatever interest rates they choose in order to attract deposit funds.
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