Question

The Depository Institutions Deregulation and Monetary Control Act of 1980:

a) Required all banks to maintain reserve deposits with the Fed.
b) Eliminated the requirement that banks hold reserve deposits with the Fed.
c) Prohibited nonmember banks from receiving discount loans.
d) Required all state banks to join the Federal Reserve System.

Answer 1

The Depository Institutions Deregulation and Monetary Control Act of 1980 required all banks, not just Federal Reserve members, to maintain reserve deposits with the Fed.

Step-by-step explanation:

The Depository Institutions Deregulation and Monetary Control Act of 1980 addressed various aspects of banking regulations. One of the significant provisions of this act was to require all banks to maintain reserve deposits with the Federal Reserve, a shift from earlier practices that mandated only member banks to maintain such reserves.

This law expanded the Fed's influence over the banking system, making it more uniform by including all commercial banks, regardless of Federal Reserve membership status, under the umbrella of the Federal Reserve's authority.

Additionally, it allowed the Federal Reserve to impose reserve requirements to non-member banks and granted these banks access to the Federal Reserve's discount window and other services. Consequently, the correct answer to the question is: a) Required all banks to maintain reserve deposits with the Fed.