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The Transformation Of U.S. Banking And Finance: From Regulated Competition To Free-Market Receivership, Timothy A. Canova

Timothy A. Canova

This article offers a critique of the deregulation of banking and finance that started with the breakdown of the Bretton Woods regime of fixed exchange rates during the Nixon administration, accelerated with interest rate deregulation during the Carter administration, and was deepened during the Reagan administration. Deregulation is seen as a changing of paradigms, from the New Deal regulatory model that limited price competition and channeled credit to socially useful purposes. The monetary and fiscal implications are significant. The regulatory model, particularly in its heyday, served to limit the authority of the Federal Reserve, neutralized monetary policy, and invigorated other …