What Are The Financial Regulations Of Federal Reserve?

In addition to using the three major instruments, the Federal Reserve has his regulated financial markets by limiting interest rates. Until the 1980s, most interest rtes paid by commercial banks were controlled. Banks were not allowed to pay interest on checking accounts, and there were ceilings on interest rates on savings accounts and time deposits.
Regulated interest rates could not survive in competitive markets. Financial institutions devised new types of instruments, which lured funds from low yield deposits. The high interest rates of the late 1970s and early 1980s put further pressure on the system, because banks had to compete with money market mutual funds. Eventually the regulatory edifice constructed during the Great Depression began to crumble. Congress reacted with the Banking Act of 1980 and 1982, which largely deregulated interest rates.
The banking Acts of 1980 and 1982 created a regulatory structure that has largely decontrolled interest rates in financial markets. The analytical basis of the new approach was to separate transactions accounts from no transactions accounts. The primary purpose of transactions accounts, such as a checking account, is to reserve as a means of payment.