In the 1980s, the S&L industry was in crisis and the crisis required government

ID: 1097446 • Letter: I

Question

In the 1980s, the S&L industry was in crisis and the crisis required government intervention regulatory changes and punishment for perpetrators of the crisis. From 2007 to 2009 the US finacial system was in crisis and that crisis also required government intervention and regulatory changes.In what ways was the government's response to the S&L crisis similar to its response to the 2007-09 crisis? In what ways was government intervention regulatory change and punishment for perpetrators different?

Explanation / Answer

the S and L crisis is the largest finacial crisis in the US economy. the saving and loan crisis emerged in 1970 to 1980s. and it is finally ending in 1990s. the volatile interest climate of the 1970s the large share of depositors removed their funds from savings and loan institutions and deposited in money market mutual funds because they get higher rates of interest rates and money market werent the government regulation Q, which capped the S&L couldpay the interst rates to the depositors. the S&L largly making their funds from maotgages and car loans and other personal loans.the government impact on saving and loan criss is that the provisions of the financial institutions reform and recovery enforcement act 1989. this increased authority of state charterd institutios, abolished FSLIC and FHLBB

the subprime morgaged crisis is 2077 and 2008 this is because of a trggered by a dramatic rise in mortgages deliquancies and foreclausure in the united states. the crisis is occured from the closing years of 20 the centuary. in the crisis time the US central bank lowered the target of federal fund rate from 5.25 to 2 % and discount rates from 5.75 to 0.25%. the bank solvency was the losses from the mortgage backed securities and other securities purchased from borrowed money have dramatically reduced the capital base of institutions.

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In the 1980s, the S&L industry was in crisis and the crisis required government

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In the 1980s, the S&L industry was in crisis and the crisis required government

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