Capital forbearance and thrifts: an ex post examination of regulatory gambling

Ramon Degennaro and James Thomson

No 9209, Working Papers (Old Series) from Federal Reserve Bank of Cleveland

Abstract: 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.

Keywords: Savings; and; loan; associations (search for similar items in EconPapers)
Date: 1992
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Citations: View citations in EconPapers (8)

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Working Paper: Capital forbearance and thrifts: an ex post examination of regulatory gambling (1993)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcwp:9209

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