ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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FSLIC
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FDIC
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Fed
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National Banking System
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Detailed explanation-1: -The roots of the S&L crisis lay in excessive lending, speculation, and risk-taking driven by the moral hazard created by deregulation and taxpayer bailout guarantees. Some S&Ls led to outright fraud among insiders and some of these S&Ls knew of-and allowed-such fraudulent transactions to happen.
Detailed explanation-2: -The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of 32% (1, 043 of the 3, 234) savings and loan associations (S&Ls) in the United States from 1986 to 1995.
Detailed explanation-3: -When interest rates rose, these mortgages lost a considerable amount of value, which essentially wiped out the S&L industry’s net worth. Policymakers responded by passing the Depository Institutions Deregulation and Monetary Control Act of 1980.