Monetary Control Act

DEFINITION of 'Monetary Control Act'

Title 1 of a two-title act passed in 1980 that represented the first significant reform in the banking industry since the Great Depression. One of the major highlights of the Monetary Control Act was the deregulation of interest rates paid by depository institutions such as banks. It also opened the Fed discount window and extended reserve requirements to all domestic banks.

BREAKING DOWN 'Monetary Control Act'

The Monetary Control Act and contained several provisions relating to bank reserve and deposit requirements. It created the popular Negotiable Order of Withdrawal (NOW) accounts and also raised the amount of FDIC insurance protection from $40,000 to $100,000 per account.

Title 2 of this Act was the Depository Institutions Deregulation Act of 1980.

RELATED TERMS
  1. Emergency Banking Act Of 1933

    A bill passed during the administration of former U.S. President ...
  2. Deregulation

    The reduction or elimination of government power in a particular ...
  3. Federal Deposit Insurance Corporation ...

    Passed in 1991 at the height of the Savings and Loan Crisis (S&L), ...
  4. Depositary Receipt

    A negotiable financial instrument issued by a bank to represent ...
  5. Federal Discount Rate

    The interest rate set by the Federal Reserve that is offered ...
  6. Overnight Rate

    The interest rate at which a depository institution lends immediately ...
Related Articles
  1. Budgeting

    On This Day In Finance: June 16 - 76th Anniversary Of The FDIC

    The Glass-Steagall Act of 1933 would reform the banking indusry, and attempt to protect the average investor.
  2. Insurance

    How the Federal Deposit Insurance Corporation (FDIC) Works

    Learn more about the Federal Deposit Insurance Corporation (FDIC) and what happens to your deposits over $250,000 if a member bank fails.
  3. Personal Finance

    Dodd-Frank's Consequences

    We look at the true fallout of the Dodd-Frank Regulatory Reform Bill.
  4. Home & Auto

    From Booms To Bailouts: The Banking Crisis Of The 1980s

    The economic environment of the late 1970s and early 1980s created the perfect storm for a banking crisis.
  5. Investing Basics

    What is a Bank?

    A bank is a financial institution licensed to receive deposits or issue new securities to the public.
  6. Economics

    Loopholes In The Dodd-Frank Act

    Certain aspects of Dodd-Frank should be re-examined for their effectiveness.
  7. Economics

    How Central Banks Control The Supply Of Money

    A look at the ways central banks pump or drain money from the economy to keep it healthy.
  8. Investing

    Why Banks Don't Need Your Money to Make Loans

    Contrary to the story told in most economics textbooks, banks don't need your money to make loans, but they do want it to make those loans more profitable.
  9. Investing Basics

    The Industry Handbook: The Banking Industry

    If there is one industry that has the stigma of being old and boring, it would have to be banking; however, a global trend of deregulation has opened up many new businesses to the banks. Coupling ...
  10. Options & Futures

    Financial Regulators: Who They Are And What They Do

    Find out how these government agencies govern the financial markets.
RELATED FAQS
  1. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  2. What role did the Great Depression play in developing America's bank reserve policies?

    Learn about the changes to the Federal Reserve system and bank reserve laws in the United States in the aftermath of the ... Read Answer >>
  3. Has deregulation helped or hurt the profitability of companies in the telecommunications ...

    Read about the impact of deregulation on the U.S. telecommunications sector, particularly with regards to the profits of ... Read Answer >>
  4. How are investment banks regulated in the United States?

    Read about the extensive regulations placed on investment banks in the United States, beginning with the Glass-Steagall Act ... Read Answer >>
  5. How was Glass-Steagall weakened prior to its repeal?

    Learn about the gradual relaxation of the strict banking regulations under Glass-Steagall, eventually culminating in the ... Read Answer >>
  6. What are the Federal Reserve's guidelines on demand deposit accounts?

    Read about some of the Federal Reserve's requirements and guidelines regarding the treatment, safeguarding and processing ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center