Regulation Q

Regulation Q,

Definition of Regulation Q:

  1. The original rule was created in 1933, in accordance with the Glass-Steagall Act, with the goal of prohibiting banks from paying interest on deposits in checking accounts. It also enacted ceilings on the interest rates that could be paid in other types of accounts.

  2. The Federal Reserve regulation that establishes a limit on the interest rate a bank can pay on deposits held in savings accounts.

  3. Regulation Q is a Federal Reserve Board rule that sets "minimum capital requirements and capital adequacy standards for board regulated institutions" in the United States. Regulation Q was most recently updated in 2013 in the aftermath of the 2007–2008 Financial Crisis and continues to go through changes. For example, the latest adjustment proposes to set minimum capital requirements for insurance companies.

How to use Regulation Q in a sentence?

  1. In updating Regulation Q, the Federal Reserve implemented rules to ensure banks maintain sufficient capital that will allow them to continue lending despite losses or any downturns in the economy.
  2. Regulation Q eventually led to the emergence of money market funds as a workaround to the prohibition of paying interest.
  3. The original rule was created in 1933, in accordance with the Glass-Steagall Act, with the goal of prohibiting banks from paying interest on deposits in checking accounts.

Meaning of Regulation Q & Regulation Q Definition