Savings and Loan Industry

S&L Deregulation Creates Moral Hazard: Recipe for Systematic Fraud

| Importance: 8/10

Reagan-era S&L deregulation creates massive moral hazard by combining three toxic elements: elimination of prudential lending standards, expanded federal deposit insurance covering risky investments, and weakened regulatory oversight. The Garn-St. Germain Act removes Depression-era constraints …

Ronald Reagan Savings and Loan industry Federal Home Loan Bank Board Federal Savings and Loan Insurance Corporation s&l-crisis moral-hazard deregulation fraud deposit-insurance
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