Started the FDIC
Brought about banking reforms to control speculation (the assumption of the risk of loss, in return for the uncertain possibility of a reward)
Established Regulation Q: put interest ceilings on savings accounts, zero interest for checking, and promoted the emergence of N.O.W. and Money Market accounts -the Depository Institutions Deregulation and Monetary Control Act of 1980 later repealed Regulation Q
Established the allocation of currency by the Federal Reserve for the first time ever
Separated bank types: Commercial banking (individuals, small business, large organizations) vs. Investment banking (corporations and municipalities- use of securities)
Arguments for keeping it around:
1)Preventing the same institution from granting credit, setting up provisions for the use of credit, lending, and investing.
2)Depository institutions already have control over other people's money, this act would limit their activity in the market for funds (loans or investments) to ensure stability and healthy competition
3)Securities can bring about substantial losses, and as a result, jeopardize the value of deposits. Since those deposits are guaranteed by the FDIC, government must cough up our money. ***Remember government cannot create money, it can only re-assign (earmark) it
4)Depository Institutions are supposed to manage(minimize) risk.
This act was repealed in 1999 by the Gramm-Leach Bliley Act.