Thus, every time the market interest rates rise, substantial amounts of funds are withdrawn by consumers for placement in instruments with higher rates of return. The banks would have had additional authority to make commercial loans and invest in commercial paper. Also recommends consolidation of the regulators. Institutions Regulatory and Interest Rate Control Act of 1978 enacted. Weak version of previous recommendations.
Inflation moves into double digits for second time in five years.
The law is a Carter Administration initiative aimed at eliminating many of the distinctions among different types of depository institutions and ultimately removing interest rate ceiling on deposit accounts. This last provision is added without debate. Reform Act of 1981 enacted. Provides powerful tax incentives for real-estate investment by individuals. Rather than showing that an institution is insolvent, the certificates make it appear solvent.