Page "Glass–Steagall Act" Paragraph 96

Regulation Q limits on interest rates for time deposits at commercial banks first became “ effective ” in 1966 when market interest rates exceeded those limits.

This produced the first of several “ credit crunches ” during the late 1960s and throughout the 1970s as depositors withdrew funds from banks to reinvest at higher market interest rates.

Unable to meet the borrowing requests of all their corporate customers, commercial banks helped their “ best customers ” establish programs to borrow directly from the “ capital markets ” by issuing commercial paper.

Commercial banks were increasingly left with lower credit quality, or more speculative, corporate borrowers that could not borrow directly from the “ capital markets .”