Passage of the Depository Institutions Deregulation and Monetary Control Act of 1980

Question

Quizplus · Accepted Answer

The Depository Institutions Deregulation and Monetary Control Act of 1980 created uniform reserve requirements for all depository financial institutions, replacing the patchwork of requirements that had previously existed. This was one of the main purposes of the legislation, as it was seen as a way to simplify regulation of the banking system and promote efficiency.

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.