William Black was interviewed recently on the Real News regarding President Reagan’s role in the Savings and Loan Crisis. For video and complete transcript click here.
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Misleading ideologically driven headline folks. When you actually listen to the interview he blames Democrats as much as he does Reagan. Also, in the end none of this would have mattered if it weren't for FDIC insurance which is/was a major enabler of the frauds allowing any S&L or bank no matter how shaky to acquire unlimited funds by offering a high interest rate. With FDIC insurance savers have no incentive to discriminate against poor lending practices of banks and S&Ls.
"With FDIC insurance savers have no incentive to discriminate against poor lending practices of banks and S&Ls." Of course there is no way to tell until after the fact, but dont let that bother you.With that out of my system, I just want to thank you guys for the excellent writing you are doing here. I appreciate your not pulling punches on the actions of either party.Steve
Really? Deposit insurance was at fault? Deposit insurance seemed to help facilitate a quite remarkable banking system for its first 50 years of existence. What precipitated the S&L crisis was the deregulation of the S&L's beginning with the Monetary Control Act of 1980. Previously, interests rates were capped and many kinds of risky loans were strictly forbidden. Once the deregulation was enacted, it took less than a decade for the S&L's to completely wipe themselves off the map.