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Deposit interest rate ceilings

Maximiano Pinheiro
Publication Year 
This article surveys two strands of literature on deposit interest rate ceilings. First, we provide an overview of articles on the so called ‘Regulation Q’, which was promulgated in the United States in 1933 and lasted for more than 50 years. It is a very rich experience with deposit rate controls and their subsequent liberalization, and it generated large controversy amongst American economists, in particular since the mid-1960s when the deposit rate ceilings became permanently binding.We also review a second and mostly unrelated strand of literature consisting of articles, some of them rather recent, which discuss and assess deposit rate ceilings as a prudential tool, alone or in conjunction with some form of minimum capital requirements, based on banking models developed for the purpose.
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