Economic Review

The Monetary Control Act of 1980 radically changed the role of the Federal Reserve in the interbank clearing market. Among other things, the Act required the Fed to give all depository institutions equal access to its payments services and to price those services competitively. In this article, Anatoli Kuprianov explains why Congress legislated this change.

At least three developments in the 1970s, including the introduction of electronic payments systems, the deregulation of the thrift industry, and the decline in membership in the Federal Reserve System, forced consideration of the questions of access to and pricing of Fed services. Because of the complex issues involved, the debate could only be resolved through comprehensive legislation which addressed all of them simultaneously.