Abstract
The savings and loan (S&L) industry is a good place to study the causes of depository institution failure for two reasons. First, in contrast to commercial banks, the traditional S&L is a relatively simple organization. Second, cause and effect cannot be determined without outcome variation, and the S&L industry provides plenty of variation in failure rates. Figure 1 plots the failure rate of federally insured S&Ls for the years 1934–1988. for comparison, the average failure rate during the four year period 1930–1933 is also shown.1
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsPreview
Unable to display preview. Download preview PDF.
References
Barth, James R. 1991. The Great Savings and Loan Debacle. AEI Press.
Barth, James R., Philip F. Bartholomew and Michael G. Bradley 1989. “The Determinants of Thrift Resolution Costs.” Research Paper no. 89-03, Office of the Chief Economist, Office of Thrift Supervision, November.
Barth, James R., Philip F. Bartholomew and Carol J. Labich 1989. “Moral Hazard and the Thrift Crisis: An Analysis of 1988 Resolutions,” in Federal Reserve Bank of Chicago, Banking System Risk: Charting a New Course. Chicago: 344–84.
Barth, James R., John J. Feid, Gabriel Riedel and M. Hampton Tunis 1989. “Alternative Federal Deposit Insurance Regimes.” Research Paper no. 152, Office of Policy and Economic Research, Federal Home Loan Bank Board, January.
Bodfish, H. M. and A. D. Theobald 1938. Savings and Loan Principles. New York, NY: Prentice-Hall.
Bowman, Edward H. 1980. “A Risk-Return Paradox for Strategic Management.” Sloan Management Review 21: 17–31.
Brewer, Elijah, M 1989. “Full-Blown Crisis, Half-Measure Cure.” Federal Reserve Bank of Chicago Economic Perspectives 13: 2–16.
Downs, Anthony 1985. The Revolution in Real Estate Finance. Washington D.C.: Brookings Institution.
Federal Home Loan Bank Board 1976-1989. Savings & Home Financing Source Book. Washington, D.C. (annual).
Glymour, Clark, Richard Scheines, Peter Spirtes and Kevin Kelly 1987. Discovering Causal Structure: Artificial Intelligence, Philosophy of Science, and Statistical Modeling. San Diego, CA.: Academic Press.
Jaffee, Dwight M. 1976. “The Asset/Liability Maturity Mix of S&Ls: Problems and Solutions.” In Change in the Savings and Loan Industry: Proceedings of the 2nd Annual Conference. San Francisco, CA.: Federal Home Loan Bank of San Francisco: 59–88.
Jaffee, Dwight M. 1989. “Symposium on Federal Deposit Insurance for S&L Institutions.” The Journal of Economic Perspectives 3: 3–9.
Kane, Edward J. 1989a. The S&L Insurance Mess: How Did It Happen? Washington, D.C: Urban Institute Press.
Kane, Edward J. 1989b. “The High Cost of Incompletely Funding the FSLIC’s Shortage of Explicit Capital.” The Journal of Economic Perspectives 3
Kendall, Leon T. 1962. The Savings and Loan Business. Englewood Cliffs, NJ.: Prentice-Hall.
Kormendi, Roger C, Victor L. Bernard, S. Craig Pirrong and Edward Snyder 1989. Crisis Resolution in the Thrift Industry. Report of the Mid-America Institute Task Force on the Thrift Crisis.
Mosteller, Frederick and John W. Tukey 1977. Data Analysis and Regression. Reading, MA.: Addison-Wesley.
Niçois, Alfred 1972. Management and Control in the Mutual Savings and Loan Association. Lexington, MA.: Lexington Books.
Roessner, Gilbert 1976. “Comment on Jaffee.” In Change in the Savings and Loan Industry: Proceedings of the 2nd Annual Conference. San Francisco, CA.: Federal Home Loan Bank of San Francisco: 103–7.
Samuelson, Paul A. 1945. “The Effects of Interest Rate Increases on the Banking System,” American Economic Review (March): 16–27.
Samuelson, Paul A. 1969. “An Analytic Evaluation of Interest Rate Ceilings for Savings and Loan Associations and Competitive Institutions.” In Irwin Friend (ed.) Study of the Savings and Loan Industry, 4 vols. Washington, D.C., Federal Home Loan Bank Board: 1561–90.
Solow, Robert M. 1979. “What We Know and Don’t Know About Inflation.” Technology Review (December/January): 31–46.
Stiglitz, Joseph E. 1993. Economics. New York, NY: Norton.
Tukey, John W. 1977. Exploratory Data Analysis. Reading, MA.: Addison-Wesley.
White, Lawrence J. 1991. The S&L Debacle: Public Policy Lessons for Bank and Thrift Regulation. New York, NY.: 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
Lilly, G.A. (1995). The Savings and Loan Debacle: Moral Hazard or Market Disaster?. 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_6
Download citation
DOI: https://doi.org/10.1007/978-94-011-0663-4_6
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-4290-1
Online ISBN: 978-94-011-0663-4
eBook Packages: Springer Book Archive