Which of the following contributed to falling profits for banks in the 1970s and early 1980s?

Question

Quizplus · Accepted Answer

All of the above factors contributed to falling profits for banks during the 1970s and early 1980s. Regulation Q, which capped the interest rates banks could offer, made it difficult for banks to attract deposits during periods of high inflation. High inflation itself eroded the value of money, making it more expensive for banks to borrow and lend. Competition from mutual funds, which offered higher returns than banks could offer on their savings accounts due to Regulation Q, also drew away potential bank deposits, further impacting their profitability.

Which of the Following Contributed to Falling Profits for Banks