Garn-St. Germain Depository Institutions Act

AAA

DEFINITION of 'Garn-St. Germain Depository Institutions Act '

A law enacted by Congress in 1982 to enable banks and other savings institutions to compete more readily in the money market. It got rid of the interest rate ceiling that they once had to abide by, authorized them to make commercial loans and gave the federal agencies the ability to approve bank acquisitions.

INVESTOPEDIA EXPLAINS 'Garn-St. Germain Depository Institutions Act '

This act was one of the contributing factors of the Savings and Loan Crisis. The S&L crisis was one of the largest government bailouts in U.S. history costing approximately $124 billion. The bailout came to help the 747 savings and loan associations in the U.S. but failed, partly due to the Garn-St. Germain Depository Institutions Act.

RELATED TERMS
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which ...
  2. Regulation O

    One of the regulations set forth by the Federal Reserve. Regulation ...
  3. Interest Rate Ceiling

    The maximum interest rate that a financial institution can charge ...
  4. Money Market

    A segment of the financial market in which financial instruments ...
  5. Depression

    A severe and prolonged downturn in economic activity. In economics, ...
  6. Bailout

    A situation in which a business, individual or government offers ...
Related Articles
  1. Analyzing A Bank's Financial Statements
    Fundamental Analysis

    Analyzing A Bank's Financial Statements

  2. Top 6 U.S. Government Financial Bailouts
    Insurance

    Top 6 U.S. Government Financial Bailouts

  3. Are Your Bank Deposits Insured?
    Savings

    Are Your Bank Deposits Insured?

  4. What Causes A Currency Crisis?
    Forex Fundamentals

    What Causes A Currency Crisis?

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center