The Savings and Loan Crisis: Lessons from a Regulatory Failure

  • Editors
  • James R. Barth
  • Susanne Trimbath
  • Glenn Yago

Table of contents

  1. Front Matter
    Pages i-xxxviii
  2. Savings and Loans in Historical Perspective

  3. Unintended Consequences of Government Policy

    1. R. Dan Brumbaugh Jr., Catherine J. Galley
      Pages 83-102
  4. Macroeconomic Implications of Structural Change in Financial Services

  5. International Implications of the Savings and Loan Crisis

  6. The Public Record: Media and Finance

    1. Lawrence T. Nichols, James J. Nolan III
      Pages 143-171
    2. Donald McCarthy
      Pages 173-178
  7. The Empirical Record

    1. James R. Barth, Susanne Trimbath, Glenn Yago
      Pages 179-250
  8. Summation

  9. Back Matter
    Pages 343-392

About this book

Introduction

Robert L. Bartley Editor Emeritus, The Wall Street Journal As this collection of essays is published, markets, regulators and society generally are sorting through the wreckage of the collapse in tech stocks at the turn of the millennium. All the more reason for an exhaustive look at our last “bubble,” if that is what we choose to call them. We haven’t had time to digest the lesson of the tech stocks and the recession that started in March 2001. After a decade, though, we’re ready to understand the savings and loan “bubble” that popped in 1989, preceding the recession that started in July 1990. For more than a half-century, we can now see clearly enough, the savings and loans were an accident waiting to happen. The best insurance for financial institutions is diversification, but the savings and loans were concentrated solely in residential financing. What’s more, they were in the business of borrowing short and lending long, accepting deposits that could be withdrawn quickly and making 20-year loans. They were further protected by Regulation Q, allowing them to pay a bit more for savings deposits than commercial banks were allowed to. In normal times, they could ride the yield curve, booking profits because long-term interest rates are generally higher than short-term ones. This world was recorded in Jimmy Stewart’s 1946 film, It’s a Wonderful Life.

Keywords

Investment banking credit risk crisis macroeconomics transformation

Bibliographic information

  • DOI https://doi.org/10.1007/b109751
  • Copyright Information Springer Science + Business Media, Inc. 2004
  • Publisher Name Springer, Boston, MA
  • eBook Packages Springer Book Archive
  • Print ISBN 978-1-4020-7871-2
  • Online ISBN 978-1-4020-7898-9
  • Series Print ISSN 1571-4772
  • About this book
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