The money market fund threat.
The national banking system.
The national banking system. In 1863 the congress passed the National Bank Acts, which set up a system of privately owned banks chartered by the government. The new banks, called national banks, issued notes backed by U.S. government bonds. The notes of these banks were strictly controlled by the government. Later, the government drove state bank notes out of circulation by imposing a tax on their use.
The new national banking system gave the nation a safe, uniform currency. But it did not provide a way to increase the money supply to meet the needs of the growing economy. Periodic shortages of cash, together with inadequate reserve requirements, caused a series of financial crises. During each panic, many banks closed temporarily because they could not give depositors their money. Some of these banks never reopened, and the economy suffered. To end the repeated crises, Congress passed the Federal Reserve Act of 1913.
Words you may need:
own-владеть
impose-облагать (налогом)
bond-облигация
circulation-обращение
currency-валюта
shortage –нехватка, недостаток
inadequate-не отвечающий требованиям
requirement-требование
The money market fund threat. During the early 1970's, many private investment companies began to offer money market funds. These funds paid interest rates on their deposits that exceeded the rates offered by banks and thrifts. As a result, many people began to withdraw money from lower-yielding bank and thrift accounts and to deposit it in money market funds.
The shift of deposits from banks and thrifts to money market funds increased rapidly. In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act This act gradually raised the federal ceilings on bank and thrift interest rates and provided for their complete removal in 1986. The act also authorized all banks and thrifts to offer NOW accounts.
The continuing growth of the money market funds led to the Garn-St. German Depository Institutions Act, which Congress passed in 1982. This act allowed commercial banks and thrifts to compete directly with money market funds. It authorized them to offer federally insured accounts that would also pay market interest rates and allow withdrawals on demand. The law also expanded the lending authority of thrifts.
Words you may need:
thrift- сберегательное учреждение
withdraw –брать назад
lower-yielding-имеющий низкий доход
rapidly-быстро
ceiling- потолок (предел кредитования процентных ставок...)
threat-опасность
authority-власть