Savings and Loans

Paper Summary:

In this article the writer discusses the US banking crisis of the 1980s otherwise known as the savings and loan crisis. The writer notes that the foundations of the crisis are found in the late 1960s and the 1970s when various states began to deregulate the savings and loans chartered by them. The writer points out that in the 1980s, continued deregulation and lax oversight contributed to the savings and loan crises, which ultimately cost the U.S. taxpayers billions of dollars to repair. The writer concludes that the primary question that the banking crisis of the 1980s leaves one with, is not if this type of industry transgression will occur again, but rather, when it will occur again.

Outline:
Abstract
The Crisis Foundations
Regulatory Expansion of Services
Mid Decade Industry Expansion
Conclusion

From the Paper:

"The US banking crisis of the 1980s centered on the failure of some of the nation's largest savings and loans (S&L) institutions and the policies and regulations that seemed to facilitate this crisis. The US banking crisis of the 1980s crisis did not, however, simply occur in a vacuum and take the nation by surprise. While its ultimate severity may have surprised some people familiar with the industry, in fact, many people recognized that the S&L crisis really had its roots in the 1960s and 1970s when market interest rate increases undermined the S&L industry's competitiveness for deposits. Thus, the foundation of the S&L crisis of the 1980s has its roots during the 60's and 70's when the original state imposed rate ceilings limited S&L competitiveness and then, subsequently, state and federally mandated policies and regulations over compensated for these earlier restrictions through aggressive deregulation."

Sample of Sources Used:

• Ferguson, A. (1993). The People and the politics behind the $1 trillion savings and loan scandal. Fortune, 127/12.
• Graham, Leach, Bliley Act. The US Senate Committee on Banking, Housing and Urban Affairs (online). Retrieved February 3, 2007 from: http://banking.senate.gov/index.htm
• Lowy, M. (1991). High Rollers: Inside the Savings and Loan Debacle. New York: Praeger Publishers.
• Mezey, M. L. (1989). Congress, the President, and Public Policy. Boulder, CO: Westview Press.
• Spring, T. (1993). The coming bank scandal. USA Today Magazine, 122/2582.

More papers on Savings and Loans:

• Cause and Effect Essay # 112318 : "The Savings and Loans Crisis"
• Essay # 19199 : "Accounting Firm Involvement With Savings and Loans"
• Persuasive Essay # 118436 : "Keating and the Savings and Loan Scandal"

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