The Savings and Loan Crisis: Lessons from a Regulatory Failure / Edition 1

The Savings and Loan Crisis: Lessons from a Regulatory Failure / Edition 1

by James R. Barth
     
 

ISBN-10: 1402078714

ISBN-13: 9781402078712

Pub. Date: 09/30/2004

Publisher: Springer US

Our nation's financial institutions operated profitably over the decades despite periods of severe turmoil. Between 1980 and early 1995, however, 1,273 savings and loan associations, 1,569 commercial and savings banks and 2,330 credit unions failed in the U.S. The cost of resolving this crisis in the banking sector exceeded USD 190 billion. The Savings And Loan

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Overview

Our nation's financial institutions operated profitably over the decades despite periods of severe turmoil. Between 1980 and early 1995, however, 1,273 savings and loan associations, 1,569 commercial and savings banks and 2,330 credit unions failed in the U.S. The cost of resolving this crisis in the banking sector exceeded USD 190 billion. The Savings And Loan Crisis: Lessons from a Regulatory Failure sets the record straight about what actually happened to our banking institutions in the 1980s. As is documented by the highly respected and diverse group of former regulators, scholars and practitioners contributing to this book, the collapse of this industry was caused by a confluence of adverse economic conditions and misguided regulatory decisions. Poorly designed deposit insurance, faulty supervision, and restrictions on investments prevented savings and loans from adapting to a changing financial marketplace. Unable to use financial innovations, savings and loans could not hedge interest rate and credit risks. These factors blocked portfolio diversification and lay at the root of the crisis. The savings and loan crisis was an accident, but it was an avoidable one. Most of the factors responsible for causing and exacerbating the industry's problems were preventable, as is made clear in this volume. This book also provides an insider's view of the transformation of the financial services industry in the United States since the 1980s: how the managers and owners make decisions about product offerings and investments; how the regulators monitor performance and enforce the rules; and how Congress and the Administration influence and are influenced by the financial services industry. Lastly, it focuses attention on the lessons that should have been learned from this difficult period in the history of U.S. banking, and that should help prevent future banking crises everywhere.

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Product Details

ISBN-13:
9781402078712
Publisher:
Springer US
Publication date:
09/30/2004
Series:
The Milken Institute Series on Financial Innovation and Economic Growth, #5
Edition description:
2004
Pages:
440
Product dimensions:
6.10(w) x 9.25(h) x 0.04(d)

Table of Contents

What Have We Learned from the Thrift and Banking Crises of the 1980s?.- The Savings and Loan Debacle: A Perspective from the Early Twenty-First Century.- Some Hope for the Future, after a Failed National Policy for Thrifts.- Regulatory Regimes and Markets: The Case of Savings and Loans.- The Savings and Loan Crisis: Unresolved Policy Issues.- Macroeconomic Sources of the U.S. Savings and Loan Crisis.- What Lessons Might Crisis Countries in Asia and Latin America Have Learned from the Savings and Loan Mess?.- The Lessons of U.S. Savings and Loan Institutions: and International Development Perspective.- The Lesson of Lincoln: Regulation as Narrative in the Savings and Loan Crisis.- Lincoln Savings: a Coda.- The U.S. Savings and Loan Crisis in Hindsight 20 Years Later.- The Savings and Loan Crisis: Five Illustrative Case Studies.- Summing up: Do Savings and Loans Provide a Useful Perspective?.- A Roundtable on the Savings and Loan Crisis.

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