The root of our problem is originated at the point when Reagan deregulated the banks. Reagan had entered office in 1981. During the year of 1982 he had signed the Garn–St. Germain Depository Institutions Act of 1982. Before this act had taken place there was a ceiling on interest rates that the banks could not pass. These interest rates were the profit margins for banks and this was how they were making their money. This act also authorized banks to have the ability to make commercial loans and made it so federal agencies had the ability to approve bank acquisitions. Passing this act was a short term way of dealing with the large amount of inflation within the economy at this point in time. By doing this, banks could raise their interest rates
