Savings And Loan Crisis - S&L
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Definition of 'Savings And Loan Crisis - S&L'
One of the largest financial scandals in U.S. history, the Savings and Loan Crisis emerged in the late 1970s and came to a head in the 1980s, finally ending in the early 1990s. In the volatile interest rate climate of the '70s, large numbers of depositors removed their funds from savings and loan institutions (S&Ls) and put them in money market funds, where they could get higher interest rates since money market funds weren't governed by Regulation Q, which capped the amount of interest S&Ls could pay to depositors. S&Ls, which were largely making their money from low-interest mortgages, did not have the means to offer higher interest rates, though they tried to once interest rate ceilings were dropped in the early '80s. As S&L regulations loosened, they engaged in increasingly risky activities, including commercial real estate lending and investments in junk bonds.
Also known as "thrifts".
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Investopedia explains 'Savings And Loan Crisis - S&L'
Because S&L deposits were insured by the Federal Savings and Loan Insurance Corporation (FSLIC), depositors continued to put money into these risky institutions. A complex web of these factors and others, combined with widespread corruption, led to the insolvency of the FSLIC, the government bailout of the thrifts to the tune of $124 billion in taxpayer dollars and the liquidation of 747 insolvent S&Ls by the U.S. government's Resolution Trust Corporation. One of the largest S&L failures was that of Lincoln Savings & Loan, part of the Keating Five scandal which exposed the political corruption that was part of the S&L Crisis.
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Search results for 'Savings And Loan Crisis (S&L)'
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http://www.investopedia.com/articles/financial-theory/banking-crisis-1980s.asp
... In response to the deepening crisis, Congress also enacted the Financial Institutions
Reform ... FIRREA replaced the Federal Savings & Loan Insurance Corporation ...
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http://www.investopedia.com/articles/financial-theory/08/nightmare-banking-wall-street.asp
... Charles Keating the S&L Puppet Master The causes of the 1980s savings and loan collapse
are too diverse to be laid at ... The savings and loan crisis got its ...
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http://www.investopedia.com/articles/economics/09/investment-bubble.asp
... may occur intentionally, like when savings and loan institutions (S&L) invested
in risky real estate deals in the 1980s, eventually prompting the S&L crisis. ...
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http://stocks.investopedia.com/stock-analysis/2007/Subprime_Nightmare_Scenario.aspx
... Moreover, in the 1980s, during the S&L scandal, all it took was 100 savings and
loan institutions to default on $150 billion to create economic havoc. ...
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http://www.investopedia.com/articles/economics/08/tarp-financial-system.asp
... Resolution Trust Corp. (RTC), which was used to abate the savings and loan
(S&L) crisis of the late 1980s and early 1990s. The RTC was ...
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http://www.investopedia.com/articles/stocks/09/criminals-of-wall-street.asp
... It is argued that the savings and loan crisis (S&L) in the late 1980s and early
1990s occurred because so many institutions held large of amounts of Milken ...
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http://www.investopedia.com/articles/economics/08/credit-crunches-around-the-world.asp
... The 1980s also saw the savings and loan (S&L) crisis in the US Following deregulation
in the industry, S&Ls began paying higher interest rates on short-term ...
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http://www.investopedia.com/articles/economics/08/government-financial-bailout.asp
... Be Protected?) Flush with funds, numerous savings and loan ... Total loan defaults ran
into the billions of dollars ... On Wall Street.) To address the crisis, and the ...
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http://www.investopedia.com/university/banking-system/banking-system8.asp
... Stuck between plunging collateral values, rampant loan defaults and deposit flight,
many banks ... The S&L crisis of the 1980s seems to have stemmed in part from a ...
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http://stocks.investopedia.com/stock-analysis/2007/Subprime_Reality_Check.aspx
... find some similarities between today's subprime mess and the savings & loan scandal
of ... Jones Industrial Average climbed 200%, even with the S&L debacle and ...
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