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Savings and Loan Crisis: Explained, Summary, Timeline, Bailout, Finance, Cost, History

The following is a detailed summary of the major causes for losses that hurt the savings and loan business in the 1980s. More on the topic:

Lack of net worth for many institutions as they entered the 1980s, and a wholly inadequate net worth regulation.
Decline in the effectiveness of Regulation Q in preserving the spread between the cost of money and the rate of return on assets, basically stemming from inflation and the accompanying increase in market interest rates.
Absence of an ability to vary the return on assets with increases in the rate of interest required to be paid for deposits.
Increased competition on the deposit gathering and mortgage origination sides of the business, with a sudden burst of new technology making possible a whole new way of conducting financial institutions generally and the mortgage business specifically.
Savings and Loans gained a wide range of new investment powers with the passage of the Depository Institutions Deregulation and Monetary Control Act and the Garn–St. Germain Depository Institutions Act. A number of states also passed legislation that similarly increased investment options. These introduced new risks and speculative opportunities which were difficult to administer. In many instances management lacked the ability or experience to evaluate them, or to administer large volumes of nonresidential construction loans.
Elimination of regulations initially designed to prevent lending excesses and minimize failures. Regulatory relaxation permitted lending, directly and through participations, in distant loan markets on the promise of high returns. Lenders, however, were not familiar with these distant markets. It also permitted associations to participate extensively in speculative construction activities with builders and developers who had little or no financial stake in the projects.
Fraud and insider transaction abuses.
A new type and generation of opportunistic savings and loan executives and owners—some of whom operated in a fraudulent manner — whose takeover of many institutions was facilitated by a change in FSLIC rules reducing the minimum number of stockholders of an insured association from 400 to one.
Dereliction of duty on the part of the board of directors of some savings associations. This permitted management to make uncontrolled use of some new operating authority, while directors failed to control expenses and prohibit obvious conflict of interest situations.
A virtual end of inflation in the American economy, together with overbuilding in multifamily, condominium type residences and in commercial real estate in many cities. In addition, real estate values collapsed in the energy states — Texas, Louisiana, and Oklahoma — particularly due to falling oil prices — and weakness occurred in the mining and agricultural sectors of the economy.
Pressures felt by the management of many associations to restore net worth ratios. Anxious to improve earnings, they departed from their traditional lending practices into credits and markets involving higher risks, but with which they had little experience.
The lack of appropriate, accurate, and effective evaluations of the savings and loan business by public accounting firms, security analysts, and the financial community.
Organizational structure and supervisory laws, adequate for policing and controlling the business in the protected environment of the 1960s and 1970s, resulted in fatal delays and indecision in the examination/supervision process in the 1980s.
Federal and state examination and supervisory staffs insufficient in number, experience, or ability to deal with the new world of savings and loan operations.
The inability or unwillingness of the Bank Board and its legal and supervisory staff to deal with problem institutions in a timely manner. Many institutions, which ultimately closed with big losses, were known problem cases for a year or more. Often, it appeared, political considerations delayed necessary supervisory action.


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  1. Great listen.

  2. 0:35

  3. white collar crime

  4. Pete Brewton also came on the show and did a great job of explaining the details as well.

  5. Hello very nice, plz help me. I want to loan

  6. My Father was president of Los Angeles Federal Savings and loan during the crisis.

  7. Who wears short shorts?

  8. Holy crap, I thought I knew what happened back then. I knew nothing.

  9. The S&L's were originally created to give the working man a place to keep his money, and if feasible, have a place for him to take out loans for maybe a new car, improve upon his existing home, maybe build a new home, or even start a small business – all of this usually within his community…. Later, the S&Ls were often the targets of shady investors and scam businessmen whom were too well known at the major banks for their bad borrowing practices or hit/miss credit rating, so they would often approach the S&Ls as "reputable" dummy corporations, borrow huge amounts of money under the false pretense of paying it back quickly, and then suddenly dissolve as a company the minute they had the loan secured, default on these obligations, and then make off with the funds towards other unsavory business practices, thus leaving the S&L holding the bag, and making it difficult then for the working person the S&L was originally created for to save or borrow money…

  10. Awesome video 🤙

  11. I would like to see this Guy debate Thomas Sowell

  12. Cant believe how well that guy explained the S L scandal. Seems like it repeated in 08. In 2019 with the economy rolling at peak looking for the next fallout.

  13. I'm gonna Visit those foreclosin' son of a bitches down at the Indianola Savings and Loan and slap that cash down on the barrelhead and buy back the family farm. Hell, you ain't no kind of man if you ain't got land.

  14. Holy shit!

  15. Holy shit what a great documentary!!! I needed to study this because I'm a real estate Appraiser and damn did I learn something

  16. who is this guy? I study this crisis as part of my academic endeavors and he is on spot on many things.

  17. 17% on a cd?!??!!?!!?? Right now the highest is 1.3%!!!!!!! you old fuckers had it so easy!!!!! Kids have it harder! THEY MADE IT HARDER!!!! Not only the president and congress, but also the PLAUGERAT that is Federal Reserve. The grest depression ended our freedom, we are all enslaved, it's just nondenominational!!!!!

  18. wow someone clipped out audio of a lot of names.

  19. the os 3 clsinase lnir 3

  20. nva. edg. n. e. – n.e. – n.e – etc. etc. etc.

  21. & tell ten billion to tell ten billion! etc.

  22. just subbd; you… sub me back!

  23. Talking about the bank conspiracy has consequences: Look what happened to bob widdowson

    December 14, 2011
    ALBUQUERQUE – This morning in Albuquerque federal court, Robert Widdowson,
    65, pled guilty to a five-count indictment charging him with manufacturing and trafficking
    illegal drugs in Taos County, N.M. At sentencing, Widdowson faces a maximum penalty of 20
    years imprisonment and a $1,000,000 fine. Widdowson is in federal custody and remains
    detained pending his sentencing hearing, which has yet to be scheduled.

  24. This guy is great. Anybody that doubts that the bankers control everything simply needs to watch this.

  25. Does Frank Morrow look like Larry David, or am I just profiling white-haired semi-bald white men?

  26. i have to watch this bullshit for class lmfao


  28. Anyone know who these guys are? I saw another vid by them that they was also fantastic and would like to see if they have any others. Thanks!

  29. The best explanation I ever heard re: the S&L debackle, and the ensuing recession

  30. did they just get back from jogging?

  31. Such style with those shorts.

  32. 1990 WTF!!!!

  33. huh find out the truth!!!!

  34. found this too savingsandloancrisis. com

  35. لااله الا الله محمد رسول الله.من يجيداي لغة يشرح معنها اي لا معبود بحق الاالله..

  36. One of the most influencial videos I have ever seen in my life watching the first 20 minutes is scaring that crap out of me and has proven my theory because those 20 minutes are what Canada is about to go through dragging a lot of Banks and possibly the world banking system as well. We are sitting at over a trillion dollars mortgage collapse with only 4% bank deposits that banks must have all the shiny new cars ,n new boats, new homes will all be repoed.

  37. Please help my friend and check hes channel and maybe sub. He will sub back 🙂 hes channel is mrdespere1

  38. لااله الا الله محمد رسول الله.من يجيداي لغة يشرح معنها.اي لامعبود بحق الاالله..

  39. All of Gold Line International peoplegoldline com/ en/

  40. 1111

  41. مرحبا بالشباب شسالفه وش تعلقون عليه مرحبا الساع

  42. este video e reterdado orrivell idiota

  43. An impending problem since 1990, is not that much of an impending problem.

  44. jjssg

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  46. schlecht

  47. Savings and loan was a trial balloon to see if Americans would stand up.
    Now they just issue robo bailouts and nobody cares.

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