A Deregulated Rerun: Banking in the Eighties
The story of commercial banking during the past 25 years has been one of rapid and sometimes radical change. The more significant changes include the shift from demand deposit sources of funds toward interest sensitive money market liabilities such as federal funds and certificates of deposit; the payment of interest on checking accounts; the growth of variable-rate loans and the shortening of loan maturities; the decline of the prime rate convention; the growth of consumer and real estate lending; the development of automatic transfer services between different types of accounts; the rapid growth of branch banking and bank holding companies both within and between states; and the infringement of traditional commercial banking functions (such as the creation and servicing of checking accounts) by nonbank institutions.
