Asked by Margo Alvarez HB on May 16, 2024
Verified
Passage of the Depository Institutions Deregulation and Monetary Control Act of 1980
A) created uniform reserve requirements for all depository financial institutions.
B) resulted in an increase in the number of financial institutions in the United States.
C) discouraged the formation of big,nationwide,all-purpose financial institutions.
D) meant that vault cash would no longer count toward bank reserves.
Depository Institutions Deregulation
The process of removing government restrictions on banks and other depository institutions to allow for more competition and greater efficiency in the financial sector.
Reserve Requirements
Reserve requirements are regulations set by central banks determining the minimum amount of reserves that banks must hold against deposits.
Vault Cash
Physical money that is held in banks' vaults, often used to meet day-to-day withdrawal demands and regulatory reserve requirements.
- Gain an understanding of the historical adjustments in banking regulations and their outcomes.
- Discern the essential significance of major laws like the Glass-Steagall Act and the Depository Institutions Deregulation and Monetary Control Act of 1980.
Verified Answer
B, C, and D are not correct answers. While the legislation did have a number of effects on the banking system, it did not result in a significant increase in the number of financial institutions, nor did it discourage the formation of large, nationwide banks. Additionally, the Act did not eliminate the use of vault cash as a component of bank reserves, though it did change the way in which it was counted.
Learning Objectives
- Gain an understanding of the historical adjustments in banking regulations and their outcomes.
- Discern the essential significance of major laws like the Glass-Steagall Act and the Depository Institutions Deregulation and Monetary Control Act of 1980.
Related questions
The Glass-Steagall Act ...
The Depository Institutions Deregulation and Monetary Control Act of 1980 ...
The Banking Act of 1980 Resulted in Which of the ...
Statement I: Under the Depository Institutions Deregulation and Monetary Control ...
The Emergence of Mortgage-Backed Securities Provided Mortgage Brokers with an ...