The Region

Regulatory Policy Environment

Published August 1, 1988  | August 1988 issue


Bank examination division established in the department of the
Federal Reserve agent/1919




Collapse of agricultural markets and ensuing depression are key factors in reduction of Ninth District banks by 40 percent during the 1930s
About 10,000 banks fail nationwide/1930-33
Interest on demand deposits prohibited
Regulation Q introduced—limits interest rates on savings and time deposits; ceilings set at rates well above prevailing practice
Securities credit Regulations T and U issued


Selective controls on consumer credit (Regulation W) and real estate credit (Regulation X) introduced as wartime measures


Selective credit controls reinstated during Korean War


Incentives to circumvent Regulation Q ceilings heighten throughout '60s. Regulation Q ceilings raised in realignment with market rates/1962-64


Regulation Q ceilings raised in 1970, 1973 and 1979, and
taken off large CDs in 1970
Interest-paying NOW accounts appear in New England states/1974
Real estate investment trusts (REITs) cause problems for some banks/1974-75
Money market mutual funds accelerate growth, drain some consumer deposits from banks/1977


Voluntary credit restraint program introduced
Money market deposit accounts authorized, giving limited check capabilities to interest-paying savings accounts/1982
Super NOW accounts authorized/1983
Regulation Q ceilings effectively phased out/1986
International risk-based capital requirements adopted/1988