The Causes and Costs of Depository Institution Failures

The Causes and Costs of Depository Institution Failures
Author: Allin F. Cottrell
Publisher: Springer Science & Business Media
Total Pages: 251
Release: 2012-12-06
Genre: Business & Economics
ISBN: 9401106630

One of the major financial market events of the 1980s was the precipitous rise of depository institution failures including banks, savings and loan associations, and credit unions. Not since the 1930s has there been a similar period of turmoil in these industries. The events of the 1980s have inspired a renewed interest in the causes and cost of financial institution failure and several questions that had seldom been asked in the post-World War II economics literature have resurfaced Why do financial institutions fail? What are the costs of their failure? How do they differ from other firms and industries? What are the implications for financial market regulation? The Causes and Costs of Depository Institution Failures critically surveys and extends previous analyses of these questions. Audience: Scholars and researchers in the areas of money and banking, financial institutions, and financial markets, as well as regulators and policymakers.

Thrift-institution Failures

Thrift-institution Failures
Author: James R. Barth
Publisher:
Total Pages: 98
Release: 1985
Genre: Bank failures
ISBN:

Nearly 500 thrift institutions have failed during the past five years and many more institutions are likely to fail in the near future. In this paper we discuss the role of the government in regulating and insuring depository institutions and then discuss the causes of and regulatory responses to the financial troubles of the thrift industry. To assist in the examination and regulatory process, we develop a statistical model that identifies key financial variables that affect the likelihood that a thrift institution will fail. We then assess the classification and prediction accuracy of the model. Finally, we examine the effect of the same key financial variables on the doller losses to the FSLIC once an institution fails.

Failure Costs of Government-regulated Financial Firms

Failure Costs of Government-regulated Financial Firms
Author: James R. Barth
Publisher:
Total Pages: 64
Release: 1986
Genre: Bank failures
ISBN:

More than 500 thrift institutions were liquidated or merged by the regulatory authorities during the first half of the 1980s and hundreds more await similar action. Since such closures are frequently costly, it is important to assess not only the likelihood that an institution will fail, but also its likely cost, upon failure, to the insurance fund. This paper, therefore, focuses on the determinants of the cost of failure so as to assess the riskiness to the insurance agency of various activities that have recently come under increased regulatory control as well as to examine the importance of timeliness in closing insolvent institutions. It further examines the relationship between alternative book-value measures of net worth and the cost of failure.

The United States Economy

The United States Economy
Author: Mr.Yusuke Horiguchi
Publisher: International Monetary Fund
Total Pages: 612
Release: 1992-01-15
Genre: Business & Economics
ISBN: 9781557752314

This book, by a staff team headed by Yusuke Horiguchi, examines U.S. economic policy and performance in the 1980s, during which the United States enjoyed its longest peacetime expansion. Notwithstanding the buoyant growth and declines in inflation, the economy experienced low savings, current account deficits, swings in the dollar exchange rate, and structural problems--relating to the strength of financial institutions, the tax system, health care, and productivity.