Abstract
On February 13, 1989, the Shadow Financial Regulatory Committee issued Policy Statement Number 39 on “The Administration Plan to Resolve the Thrift Crisis.” In part, the statement argued that the proposal “does not recognize the critical role that the perverse incentive structure that underpins the existing deposit insurance system has played in bringing about this crisis,” and that any successful plan must “correct the present adverse incentive structure facing institutions and regulators.” The complete statement is provided in the appendix.
The analysis presented here extends Kane (1989b) and has benefited from comments by George Benston and Kenneth Guenther.
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References
Kane, E.J. 1981. Reregulation, Savings and Loan Diversification, and the Flow of Housing Finance. In Savings and loan Asset Management Under Deregulation, San Francisco: Federal Home Loan Bank of San Francisco, pp. 81–109.
Kane, E.J. 1988. Changing Incentives Facing Financial-Services Regulators. Prepared for a conference at the Federal Reserve Bank of Cleveland, Journal of Financial Services Research, 3 (2).
Kane, E.J. 1989a. How Incentive–Incompatible Insurable Funds Fail. National Bureau of Economic Research Working Paper No. 2836, Cambridge, Mass. ( February ).
Kane, E.J. 1989b. The S2026L Insurance Mess: How Did It Happen? Washington: The Urban Institute Press, 1989.
Taylor Sid, 1989. Washington Wonderland, Washington: National Taxpayers Union (April).
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© 1990 Kluwer Academic Publishers
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Kane, E.J. (1990). Defective Regulatory Incentives and the Bush Initiative. In: Kaufman, G.G. (eds) Restructuring the American Financial System. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-2197-9_8
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DOI: https://doi.org/10.1007/978-94-009-2197-9_8
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