Abstract
During the 1980s, the S&L industry experienced its worst performance since the 1930s. More than a thousand institutions failed and were resolved by regulators from January of 1980 through December of 1992 at an estimated present-value cost of nearly $130 billion. The resolution of additional troubled S&Ls will likely result in a final cost of $150 billion or more. These costs, when measured relative to the size of the industry in the 1980s, are actually greater than those incurred for S&Ls in the Great Depression.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Barth, James R. 1991. The Great Savings and Loan Debacle. Washington, D.C.: American Enterprise Institute.
Barth, James R., Philip F. Bartholomew and Michael G. Bradley 1990. “Determinants of Thrift Institutions Resolution Costs.” Journal of Finance 45: 731–54.
Barth, James R., Philip F. Bartholomew and Carol Labich 1990. “Moral Hazard and the Thrift Crisis: An Empirical Analysis.” Consumer Finance Law Quarterly Report 44: 22–34.
Barth, James R., R. Dan Brumbaugh, Jr. and Robert E. Litan 1992. The Future of American Banking. Armonk, NY: M.E. Sharpe.
Barth, James R., R. Dan Brumbaugh, Jr., Daniel Sauerhaft and George H.K. Wang 1985. “Thrift Institution Failures: Causes and Policy Issues.” Proceedings of Conference on Bank Structure and Competition, Federal Reserve Bank of Chicago: 184–216.
Barth, James R., Daniel E. Page and R. Dan Brumbaugh, Jr. 1992. “Pitfalls in Using Market Prices to Assess the Financial Condition of Depository Institutions.” Journal of Real Estate Finance and Economics 5: 151–66.
Barth, James R., Carl D. Hudson and John S. Jahera, Jr. Forthcoming. “Risk Taking in the Texas S&L Industry: Charter and Ownership Effects.” The Financial Review.
Benston, George J. 1985. An Analysis of the Causes of Savings and Loan Association Failure. Monograph Series in Finance and Economics, Salomon Brothers Center for the Study of Financial Institutions.
Benston, George J. and R. Dan Brumbaugh, Jr. 1988. “On the Controversy Over Asset Restrictions for Thrift Institutions.” Housing Finance Review 7: 18–27.
Brewer, Elijah 1990. “The Impact of Deposit Insurance on S&L Shareholders’ Risk/Return Trade-offs.” Conference on Bank Structure and Competition Proceedings, Federal Reserve Bank of Chicago: 96–140.
Brickley, James A. and Christopher M. James 1986. “Access to Deposit Insurance, Insolvency Rules and the Stock Returns of Financial Institutions.” Journal of Financial Economics 16: 345–71.
Brumbaugh, R. Dan, Jr., 1988. Thrifts Under Siege: Restoring Order to American Banking. Cambridge: Ballinger Publishing Company.
Buser, Stephen A., Andrew H. Chen and Edward J. Kane 1981. “Federal Deposit Insurance, Regulatory Policy and Optimal Bank Capital.” Journal of Finance 36: 51–60.
Craine, Roger and Richard W. Nelson 1990. “Can Depository Institutions Be Regulated as if They Were Margin Accounts?” Conference on Bank Structure and Competition Proceedings, Federal Reserve Bank of Chicago: 24–61.
Esty, Benjamin C. 1993. “Ownership Concentration and Risk-Taking in the S&L Industry.” Unpublished working paper.
Furlong, Frederick T. and Michael C. Keeley 1989. “Capital Regulation and Bank Risk-Taking: A Note.” Journal of Banking and Finance 13: 883–91.
Gelbe, Devra L. and Bernard Shull 1990. “FIRREA’s Risk Control Theories: A Framework for Empirical Investigation.” Unpublished paper.
Gunther, Jeffrey W. and Kenneth J. Robinson 1990. “Moral Hazard and Texas Banking in the 1980s: Was There a Connection?” Financial Industry Studies, Federal Reserve Bank of Dallas: 1–8.
Gup, Benton E., J. Thomas Lindley, James E. McNulty and James A. Verbrugge 1989. “The Performance of De Novo Thrift Institutions: Risk, Return, and Charter Type.” Research Paper No. 156, Office of Policy and Economic Research, Federal Home Loan Bank Board, March.
Hadaway, Beverly L. and Samuel C. Hadaway 1981. “An Analysis of the Performance Characteristics of Converted Savings and Loan Associations.” Journal of Financial Research 4: 195–206.
Kane, Edward J. 1989. The S&L Insurance Mess: How Did It Happen. Washington, D.C.: The Urban Institute Press.
Masulis, Ronald W. 1987. “Changes in Ownership Structure: Conversions of Mutual Savings and Loans to Stock Charter.” Journal of Financial Economics: 29–59.
Merton, Robert C. 1977. “An Analytic Derivation of the Cost of Deposit Insurance and Loan Guarantees: An Application of Modern Option Pricing Theory.” Journal of Banking and Finance 1: 3–11.
O’Keefe, John 1990. “The Texas Banking Crisis: Causes and Consequences 1980-1989.” FDIC Banking Review 3: 1–34.
Ronn, Ehud I. and Avinash K. Verma 1986. “Pricing Risk-Adjusted Deposit Insurance: An Option-Based Model.” Journal of Finance 41: 871–96.
Saunders, Anthony, Elizabeth Strock and Nickolaos G. Travlos 1990. “Ownership Structure, Deregulation and Bank Risk Taking.” Journal of Finance 45: 643–54.
Teall, John L. 1993. “Shareholder Control and Financial Distress in the Thrift Industry.” Journal of Business Research 26: 161–70.
Committee on Government Operations 1985. “Federal Regulation of Direct Investments by Savings and Loan Associations.” Washington D.C.: U.S. House of Representatives, November 5.
U.S. Treasury 1991. “Modernizing the Financial System: Recommendations for Safer, More Competitive Banks.” February.
Verbrugge, James A. and Steven J. Goldstein 1981. “Risk, Return, and Managerial Objectives: Some Evidence From the Savings and Loan Industry.” Journal of Financial Research 4: 45–58.
Verbrugge, James A. and John S. Jahera, Jr. 1981. “Expense-Preference Behavior in the Savings and Loan Industry.” Journal of Money, Credit and Banking 13: 465–75.
White, Lawrence J. 1991. The S&L Debacle. New York: Oxford University Press.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 1995 Springer Science+Business Media New York
About this chapter
Cite this chapter
Barth, J.R., Hudson, C.D., Jahera, J.S. (1995). S&L Closures and Survivors: Are there Systematic Differences in Behavior?. In: Cottrell, A.F., Lawlor, M.S., Wood, J.H. (eds) The Causes and Costs of Depository Institution Failures. Innovations in Financial Markets and Institutions, vol 9. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-0663-4_2
Download citation
DOI: https://doi.org/10.1007/978-94-011-0663-4_2
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-4290-1
Online ISBN: 978-94-011-0663-4
eBook Packages: Springer Book Archive