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Regulatory Structure, Regulatory Failure, And The S& L Debacle

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  • RICHARD W. Nelson

Abstract

Widespread S & L failures during the 1980s required the federal government to spend over 100 billion dollars bailing out the deposit insurance fund. This paper interprets the S & L debacle as a regulatory failure. Review of the S & L debacle suggests that regulators failed to manage the deposit insurance system efficiently. But the regulatory agencies' structure appears to have played a secondary role in contributing to regulatory failure. Faced with the same incentives, objectives, and resources, regulators probably would have behaved similarly regardless of the regulatory structure.

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  • RICHARD W. Nelson, 1993. "Regulatory Structure, Regulatory Failure, And The S& L Debacle," Contemporary Economic Policy, Western Economic Association International, vol. 11(1), pages 108-115, January.
    • Handle: RePEc:bla:coecpo:v:11:y:1993:i:1:p:108-115
    DOI: 10.1111/j.1465-7287.1993.tb00375.x
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    1. James R. Barth & R. Dan Brumbaugh, Jr. & Daniel Sauerhaft & George H. K. Wang, 1985. "Insolvency And Risk‐Taking In The Thrift Industry: Implications For The Future," Contemporary Economic Policy, Western Economic Association International, vol. 3(5), pages 1-32, September.
    2. George J. Benston & George G. Kaufman, 1988. "Risk and solvency regulation of depository institutions: past policies and current options," Staff Memoranda 88-1, Federal Reserve Bank of Chicago.
    3. Kenneth E. Scott, 1990. "Never again: the S&L Bailout Bill," Proceedings 283, Federal Reserve Bank of Chicago.
    4. James R. Barth, 1990. "Post-FIRREA: the need to reform the Federal Deposit Insurance System," Proceedings 280, Federal Reserve Bank of Chicago.
    5. Roger Craine & Richard W. Nelson, 1990. "Can depository institutions be regulated as if they were margin accounts?," Proceedings 262, Federal Reserve Bank of Chicago.
    6. Edward J. Kane, 1985. "The Gathering Crisis in Federal Deposit Insurance," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611856, December.
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