Capital forbearance and thrifts: an ex post examination of regulatory gambling
This paper estimates the losses embedded in the capital positions of the 996 FSLIC-insured savings and loan institutions that did not meet capital standards at the end of the 1970s. We compare the estimated cost of resolving the insolvencies of these institutions at the end of the 1970s with the actual failure-resolution costs for those that were closed by July 3 1, 1992, and the projected resolution costs for the remaining thrifts that are likely to be closed. Our results show that even when one considers only the direct costs associated with delayed closure of economically failed thrifts, these costs significantly exceed reasonable estimates of the cost of prompt failure resolution.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1993|
|Date of revision:|
|Publication status:||Published in Conference on Bank Structure and Competition (1993 : 29th)|
|Contact details of provider:|| Postal: P.O. Box 834, 230 South LaSalle Street, Chicago, Illinois 60690-0834|
Web page: http://www.chicagofed.org/
More information through EDIRC
|Order Information:|| Web: http://www.chicagofed.org/webpages/publications/print_publication_order_form.cfm Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kane, Edward J, 1990. " Principal-Agent Problems in S&L Salvage," Journal of Finance, American Finance Association, vol. 45(3), pages 755-64, July.
- Ramon P. DeGennaro & Larry H. Lang & James B. Thomson, 1991. "Troubled savings and loan institutions: voluntary restructuring under insolvency," Working Paper 9112, Federal Reserve Bank of Cleveland.
- Patric Hendershott & Edward J. Kane, 1992. "Office Market Values During the Past Decade: How Distorted Have Appraisals Been?," NBER Working Papers 4128, National Bureau of Economic Research, Inc.
- Barth, James R & Bartholomew, Philip F & Bradley, Michael, 1990. " Determinants of Thrift Institution Resolution Costs," Journal of Finance, American Finance Association, vol. 45(3), pages 731-54, July.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Edward J. Kane & Haluk Unal, 1988.
"Modeling Structural and Temporal Variation in the Market's Valuation of Banking Firms,"
NBER Working Papers
2693, National Bureau of Economic Research, Inc.
- Kane, Edward J & Unal, Haluk, 1990. " Modeling Structural and Temporal Variation in the Market's Valuation of Banking Firms," Journal of Finance, American Finance Association, vol. 45(1), pages 113-36, March.
- Avery, Robert B & Belton, Terrence M & Goldberg, Michael A, 1988. "Market Discipline in Regulating Bank Risk: New Evidence from the Capital Markets," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(4), pages 597-610, November.
- Christopher J. Pike & James B. Thomson, 1991. "The RTC and the escalating costs of the thrift insurance mess," Economic Commentary, Federal Reserve Bank of Cleveland, issue May.
- Asli Demirgüç-Kunt, 1991. "Principal-agent problems in commercial-bank failure decisions," Working Paper 9106, Federal Reserve Bank of Cleveland.
- John B. Shoven & Scott B. Smart & Joel Waldfogel, 1992.
"Real Interest Rates and the Savings and Loan Crisis: The Moral Hazard Premium,"
Journal of Economic Perspectives,
American Economic Association, vol. 6(1), pages 155-167, Winter.
- John B. Shoven & Scott B. Smart & Joel Waldfogel, 1991. "Real Interest Rates and the Savings and Loan Crisis: The Moral Hazard Premium," NBER Working Papers 3754, National Bureau of Economic Research, Inc.
- Kane, Edward J., 1986. "Appearance and reality in deposit insurance: The case for reform," Journal of Banking & Finance, Elsevier, vol. 10(2), pages 175-188, June.
- James B. Thomson, 1987. "FSLIC forbearances to stockholders and the value of savings and loan shares," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 26-35.
When requesting a correction, please mention this item's handle: RePEc:fip:fedhpr:421. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bernie Flores)
If references are entirely missing, you can add them using this form.