Well, for one thing, Carter was desperate to stimulate the economy, so his action, while indeed the beginning of the disastrous deregulation of the financial industry, a relatively extreme measure to a disturbing financial problem. Also, these Chicago School guys (I HATE the Chicago School of economic theory) only mention one aspect of Carters 1980 legislation. Here is a pithy summary: It forced all banks to abide by the Feds rules. It allowed banks to merge.[citation needed] It removed the power of the Federal Reserve Board of Governors under the Glass–Steagall Act to use Regulation Q to set maximum interest rates for any deposit accounts other than demand deposit accounts (with a six-year phase-out).[2] It allowed Negotiable Order of Withdrawal accounts to be offered nationwide.[2] It raised the deposit insurance of US banks and credit unions from $40,000 to $100,000. It allowed credit unions and savings and loans to offer checkable deposits. It allowed institutions to charge any loan interest rates they choose.[3][4] It required that banks be charged Fed Float for use of funds received before clearing between depository institutions. Likewise, the 1982 Garn–St. Germain Depository Institutions Act included some valuable reform. For example: An important consumer change was to allow anyone to place real estate in their own trust without triggering the due-on-sale clause that allows lenders to foreclose on a current loan upon transfer to another. This greatly facilitates the use of trusts to pass property to heirs and minors. Both bills were introduced by a Dem, this guy: en.wikipedia.org/wiki/Fernand_St._Germain who seems to have been a bit of a snakeoil peddler. There was a bunch of dodgy legislation: 1982 – Garn–St. Germain Depository Institutions Act 1999 – Gramm-Leach-Bliley Act 2000 – Commodity Futures Modernization Act of 2000 2002 – Sarbanes–Oxley Act 2003 - Fair and Accurate Credit Transactions Act of 2003 But I think Reagan deserves the biggest share of blame because he popularized the absurd notion that deregulating these markets would improve things, when all it did was reduce accountability and encourage increasingly risky and rapacious financial deals.
Posted on: Tue, 27 Jan 2015 00:53:57 +0000
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