خلاصه ماشینی:
"The changes in the banks' profitability are reflected in the rate of return on equity and the stock prices of leverage buyouts associated with mergers and acquisitions all adversely affected the profitability and the soundness of the banking industry.
Profitability and Risk Because of reforms, banks were given more freedom to become more competitive on their interest payments by offering high rates on their money market accounts.
Within the banking industry, financial reforms also brought about changes in the comopsition of deposits since a significantly larger share of deposits was now in relatively higher rate and more interest-sensitive accounts which increased interest costs/liabilities and the level of risk for the banks.
The financial reforms led to the removal of competitive constraints- providing the banks with a greater freedom to compete with one another and other financial institutions.
(See Table No. l)Compared with the pre-reform period, funds continued to move into relatively higher rate and more interest-sensitive accounts which increased interest costs/liabilities of the banks.
{P2P} In order to enjoy higher {P(1)- Modification of the interest on deposits included: lifting of the ceilings of $100,000 or more in 1973, the authorization of 26 week and $10,000 minimum denomination money market certificates in 1978, authorization of banks and savings and loans to issue no minimum balance small savers certificates at market rates in 1979, authorization of NOW accounts nationwide, ordering the eventual elimination of deposit rate ceiling and increases of FDIC and FSLIC insurance from $ 40,000 to $100,000 all were achieved in 19S0.
A. Modification of the Interest Constraints on Deposits Prior to the recent financial reforms, regulation which imposed a ceiling on the rate of interest payments by the banks and the Federal Reserve's greater regulatory power limited freedom and flexibility of the banks."