Savings and loan crisis

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The savings and loan crisis of the 1980s and 1990s (commonly nicknamed S & amp crisis ) was the 1,043 failure of 3,234 savings and loan associations in the United States of the year 1986 to 1995: Federal Savings and Loan Insurance Corporation (FSLIC) closed or completed 296 institutions from 1986 to 1989 and Resolution Trust Corporation (RTC) closed or otherwise completed 747 institutions from 1989 to 1995.

Savings and loans or "savings" are financial institutions that accept savings deposits and make mortgages, cars and other personal loans to individual members (a joint venture known in the UK as a building community). In 1995, the RTC closed 747 nationally failing institutions, worth a total possible book value of between $ 402 and $ 407 billion. In 1996, the General Accounting Office estimated total costs to be $ 160 billion, including $ 132.1 billion taken from taxpayers. RTC was created to solve the S & amp; L.

In 1979, the Federal Reserve System of the United States raised the discount rate charged by its member banks from 9.5% to 12% in an effort to reduce inflation. Building or savings and loan associations (S & Ls) have issued long-term loans with fixed interest rates that are lower than the interest rates they can borrow. In addition, S & amp; L has a deposit obligation that pays a higher interest rate than the rate at which they can borrow. When interest rates where they can borrow increase, S & amp; Ls can not attract adequate capital, from deposits to member savings accounts for example, they become bankrupt. Rather than confessing to bankruptcy, loose regulatory oversight allows S & Ls to invest in highly speculative investment strategies. It has the effect of extending the period in which S & amp; most likely technically bankrupt. This adverse action also substantially increases the economic losses for S & amp; L to be realized if their bankruptcy is found early. One extreme example is the Charles Keating financier, who paid $ 51 million financed through Michael Milken's "junk bond" operation, for his Lincoln Savings and Loan Association which at that time had a negative net worth of more than $ 100 million.

Others, such as financial writer/historian Kenneth J. Robinson or a crisis report published in 2000 by the Federal Deposit Insurance Corporation (FDIC), provide many reasons why the Savings Crisis and Loans occur. Without a certain order of significance, they identified an increase in monetary inflation beginning in the late 1960s sparked by the simultaneous domestic spending program of the "Large Society" programs of President Lyndon B. Johnson coupled with the military expenditures of the continuing Vietnam War that continued to the end 1970s. Efforts to end rampant inflation in the late 1970s and early 1980s by raising interest rates brought into recession in the early 1980s and the beginning of the S & amp; L. Deregulation of S & amp; L, combined with regulatory patience, and fraud exacerbate the crisis.

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The "thrifty" or "building" or "saving and lending" industry comes from the British building society movement that emerged in the late 18th century. American thrifts (also known as "building and loans" or "B & Ls") share many of the same basic goals: to help the working class save for the future and buy a home. Thrifts is not a non-profit cooperative organization normally run by members and local institutions that serve well-defined groups of prospective homeowners. While banks offer a variety of products for individuals and businesses, sales often only make home mortgages especially for working-class men and women. The austerity leaders believe they are part of a wider social reform effort and not the financial industry. According to the austerity leader, B & Ls not only helps people become better citizens by making it easier to buy a home, they also teach systematic saving habits and cooperation that reinforce personal morale.

The first savings were formed in 1831, and for 40 years there were several B & Ls, found only in a handful of Midwestern and eastern states. This situation changed in the late 19th century as the growth of the city and the demand for housing associated with the Second Industrial Revolution caused the number of explosions to explode. Popularity B & amp; Ls leads to the creation of new types of savings in the 1880s called "national" B & L. "Citizen" is often a nonprofit business established by bankers or industrialists who employ promoters to form local branches to sell shares to prospective members. "Citizens" pledged to pay the savings rate up to four times larger than other financial institutions.

The depression of 1893 (resulting from the financial Panic of 1893, which lasted for several years) caused a sharp decline in members, and so "citizens" experienced a sudden reversal of luck. Due to the steady flow of stable new members it is vital for the "national" to pay savings and big payrolls for the organizers, the fall of payments causes dozens of "citizens" to fail. By the end of the 19th century, almost all "citizens" were out of business (National Building and Loan Crisis). This led to the creation of the first state regulation governing B & Ls, to make austerity operations more uniform, and the establishment of national trade associations to not only protect the interests of B & L, but also drive business growth. Trade associations lead efforts to create more uniform accounting, assessment, and lending procedures. It also pioneered the urge to have all businesses refer to themselves as "savings and loans", not B & Ls, and to convince managers of the need to assume a more professional role as a financier.

In the 20th century, two decades after the end of World War II was the most successful period in the austerity industry history. The return of millions of enthusiastic soldiers to take their pre-war life led to an unprecedented post-war housing crisis and a boom with dramatic increases in the new family, and this so-called "baby boom" caused a surge in new suburban housing construction, and a major expansion beyond the center of the core cities with additional commercial development to radiate roads and highways speaking plus additional construction in 1956, during the Eisenhower government of the Interstate Highway system across the country enabling the explosion of suburban communities in the hinterlands previously remote. In the 1940s S & amp; Ls (name change for many associations occurred gradually after the late 1930s) provided most of the financing for this expansion, which now has some sort of state regulation that precedes the same regulation later than the institutionalized bank after 1929 Market Stock "Crash" and "day bank holidays "at the start of the 32nd President Franklin D. Roosevelt's administration in March 1933, and the subsequent terms and regulations in the" New Testament "program to combat the Great Depression. The result was a strong industrial expansion that lasted until the early 1960s.

Important trends include raising interest rates paid on savings to withdraw deposits, practices that result in periodic level wars between banks and even commercial banks. This war became so severe that in 1966, the United States Congress took a very unusual step to set limits on savings rates for both commercial banks and S & Ls. From 1966 to 1979, the introduction of level controls presents the ninth with unprecedented challenges, which mainly find ways to continue to grow in an economy characterized by slow growth, high interest rates and inflation. These conditions, which came to be known as stagflation, caused chaos with financial savings for various reasons. Because regulators control interest rates that can be saved by austerity, when interest rates rise, depositors often withdraw their funds and place them in accounts that generate market rates, a process known as disintermediation. At the same time, rising borrowing rates and slow economic growth make it harder for people to qualify for a mortgage which in turn limits S & Ls to generate revenue.

In response to these complex economic conditions, savings managers use several innovations, such as alternative mortgage instruments and flowering demand deposits, as a way to maintain funds and generate lending businesses. Such actions allowed the industry to continue to record asset growth and stable profitability during the 1970s despite the true number of austerity falls. Despite such growth, there are still clear signs that the industry is blistering under regulatory constraints. This is especially true with S & amp; L in the western United States that yearns for additional loan strength to ensure sustainable growth. Despite several attempts to modernize this law in the 1970s, several substantive changes were put into effect.

In 1979, the financial health of the austerity industry was challenged by the return of high interest rates and inflation, this time triggered by the doubling of oil prices and exacerbated by the depletion of resources from the Federal Savings and Loan Insurance Corporation (FSLIC). not a small matter: In 1980 there were over 4,000 savings & amp; an institutional loan with assets of $ 600 billion, of which $ 480 billion is a mortgage loan, many of them made with low fixed interest rates in an earlier era. In the United States, this is 50 percent of the entire home mortgage market. In 1983, FSLIC's reserves for failure amounted to about $ 6 billion, whereas, according to Robinson (footnote), the cost of paying off the insured depositor in a failed institution would be about $ 25 billion. Therefore, regulators are forced "patience" - allowing bankrupt institutions to remain open - and hope that they can grow from their problems.

Maps Savings and loan crisis

Cause

Deregulation

In the early 1980s, Congress passed two laws with a view to deregulate the Savings and Loans industry, the Depository Deposit and the 1980s and Garn-St. Germain Depository Institutions Act of 1982. This law allows savings to offer a wider range of savings products (including adjustable rate hypotheses), but also significantly expand their lending authority and reduce regulatory oversight. This change is intended to allow S & amp; Ls "grew" out of their problems, and thus represented the first time that the government explicitly sought to influence S & L's earnings as opposed to promoting housing and home ownership. Other changes in austerity control include endorsing the use of softer accounting rules to report their financial condition, and the removal of restrictions on the minimum number of shareholders S & amp; L. These policies, combined with the overall decline in regulatory oversight (known as patience), will then be cited as factors in the austerity of the austerity industry.

Between 1982 and 1985, S & A assets increased by 56% (compared to 24% in commercial banks). In part, the growth is leaning towards weaker institutions financially that can only attract deposits by offering very high rates and being only able to pay the interest rate by investing in high-yield, risky investments and loans.

Deregulation of S & amp; Ls in 1980, by the Deregulation of the Institute of Storage and Monetary Control, signed by President Jimmy Carter on March 31, 1980, gave them the abilities of banks without the same rules as banks, without explicit FDIC control. Savings and loan associations may choose to be under a federal state or charter. This decision was made in response to dramatically increased interest rates and inflation rates that the S & amp; L experienced because of the vulnerability in the market structure. Soon after the deregulation of a uniform federal scandal, the state-hired machines were quickly rented into federal leases, due to profits associated with the federal charter. In response, countries like California and Texas changed their rules to be similar to federal regulations.

End of inflation

Another factor is the Federal Reserve's attempt to extort inflation from the economy, marked by Paul Volcker's speech on October 6, 1979, with a series of short-term interest rate hikes. This leads to a scenario in which the increase in short-term funding costs is higher than the return on the mortgage loan portfolio, most of which may be a fixed rate mortgage (known as asset liability) mismatch). Interest rates keep rising, putting more pressure on S & amp; Ls when the 1980s began to appear and led to increased focus on high interest rate transactions. Zvi Bodie, professor of finance and economics at Boston University School of Management, writes in St. Louis Federal Reserve, "" Asset-liability mismatch is the main cause of the Deposit and Loan Crisis ".

Forbearance

The relatively larger concentration of S & amps lending, coupled with a short-term dependency on deposits for their funding, makes savings institutions particularly vulnerable to higher interest rates. As inflation increased and interest rates began to rise rapidly in the late 1970s, many S & amp; L began to suffer huge losses. The rates they have to pay to withdraw deposits are rising sharply, but the amount they get for the mortgage period remains unchanged. Losses begin to rise. This leads to a regulatory patience response, which is arguably the cause for symptoms and causes found below. To be clear, it is practice and enabling policies that are the cause of the volatility that the S & amp; L. Many people who can not afford to be allowed to stay open, and their financial problems are getting worse over time. In addition, the standard of capital is reduced both by the law and the decisions taken by the regulator. S & amp; L federal purchases are authorized to make new (and ultimately more risky) loans in addition to housing mortgages.

Disgraceful real estate lending

In an effort to capitalize on the real estate boom (outstanding US mortgage loans: 1976 $ 700 billion; 1980 $ 1.2 trillion) and high interest rates in the late 1970s and early 1980s, many S & L lends far more money than the wise, and to many S & amp; L which is not eligible to assess, especially regarding commercial real estate. L. William Seidman, former chair of the Federal Deposit Insurance Corporation (FDIC) and the Resolution Trust Corporation, stated, "The banking problems of the 80s and 90s came primarily, but not exclusively, from unhealthy real estate loans".

The brokered deposit

Deposit brokers, somewhat like stockbrokers, are paid commissions by customers to find the best certificates of deposit (CD) rates and place their subscribers' money on the CD. Previously, banks and banks could only have five per cent of their deposit-mediated deposits; the race to the base causes this restriction to be revoked. The small savings of one branch can then attract large amounts of deposits simply by offering the highest rates. To make money from this expensive money, the money should be lent at a higher rate, which means having to do more, riskier investments. This system is made even more damaging when certain deposit brokers institutionalize fraud known as "related financing". In "related financing", the deposit broker will approach the austerity and say he will direct large sums of deposits to the savings if the savings will lend to certain people money. People, however, are paid a fee for applying for loans and are told to provide loan proceeds to a deposit broker.

Primary cause by United States League of Savings Institutions

The following is a detailed summary of the main causes of losses that were detrimental to savings and loan businesses in the 1980s:

1. Lack of net worth for many institutions when they entered the 1980s, and a wholly inadequate net wealth regulation.
2. The decrease in the effectiveness of Regulatory Q in maintaining the spread between the cost of money and the rate of return of assets, essentially derived from inflation and an increase in market interest rates that accompany it.
3. The absence of the ability to vary the return on assets with an increase in the interest rate required to be paid for deposits.
4. Increased competition in the collection of saving and side mortgage origination in business, with the sudden explosion of new technologies enabling new ways to conduct financial institutions in general and mortgage business in particular.
5. Savings and Loans acquire various new investment powers with the passage of Deregulation of Monetary and Monetary Control Institutions and Garn-St. Germain Deposit Insurance Act. A number of countries also passed laws that also increased investment options. It introduces new risks and speculative opportunities that are difficult to manage. In many cases, management has no ability or experience to evaluate it, or to manage large numbers of nonresidential construction loans.
6. Regulatory deletions were originally designed to prevent over-borrowing and minimize failure. Regulatory relaxation permits lending, directly and through participation, in distant loan markets with a promise of high returns. The lenders, however, are not familiar with this distant market. It also allows the association to participate widely in speculative construction activities with builders and developers who have little or no financial stock in the project.
7. Fraud and insider trading violations from employees.
8. The new type and generation of executives and owners of loans and opportunistic loans - some of which operate in a fraudulent manner - whose expropriations from many institutions are facilitated by changes in FSLIC rules that reduce the minimum number of insured associates' shareholders from 400 to one.
9. Duty negligence on the board of directors of some savings associations. This allows management to make uncontrolled use of some new operating authorities, while directors fail to control costs and prohibit situations of apparent conflict of interest.
10. A virtualized tip of inflation in the American economy, together with overbuilding in many families, condominium type housing and in commercial real estate in many cities. In addition, real estate values ​​collapsed in energy nations - Texas, Louisiana, and Oklahoma - primarily due to falling oil prices - and weaknesses occurring in the mining and agricultural sectors of the economy.
11. Pressure is felt by management of many associations to restore net value ratios. Because they want to increase their income, they break out of their traditional lending practices to credit and markets that involve high risk, but with that they have little experience.
12. Lack of proper, accurate, and effective evaluation of business savings and loans by public accounting firms, security analysts, and the financial community.
13. The organizational structure and oversight laws, adequate to oversee and control businesses in protected environments in the 1960s and 1970s, resulted in fatal delays and indecision during the inspection/supervision process of the 1980s.
14. The supervisory and inspection staff of the federal and state are not sufficient in number, experience, or ability to handle the new world of savings and loan operations.
15. The inability or unwillingness of the Bank Board and its legal staff and supervisors to deal with the problem institution in a timely manner. Many institutions, ultimately covered with huge losses, are known to be problematic cases for a year or more. Often, emerging, political considerations delay the necessary oversight actions.

Cause and lesson

In 2005, former bank manager William K. Black listed a number of lessons that should have been learned from S & L Crisis that has not been translated into effective government action:

1. Fraud issues, and fraud controls pose a unique risk.
2. It's important to understand the fraud mechanism. Economists underestimated their prevalence and impact, and prosecutors found it difficult, even without political pressure from politicians who received campaign donations from the banking industry.
3. Controlling fraud can occur in waves created by poorly designed deregulation that creates a criminogenic environment.
4. The waves of fraud controls cause great damage.
5. Controlling frauds alters conventional restrictions on abuse into fraudulent tools.
6. Important conflict of interest.
7. Insurance deposits are not important for S & amp; L controls fraud.
8. There are not enough trained investigators in regulatory agencies to protect against control fraud.
9. Leadership of important regulators and presidents.
10. Ethics and social power are restraints on fraud and abuse.
11. Significant deregulation and important assets.
12. The SEC must have a chief criminologist.
13. Control fraud beats corporate protection and governance reforms.
14. Stock options increase looting by control fraud.
15. The "reinventing government" movement must effectively deal with control fraud.

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Failure

In 1980, the United States Congress provided all savings, including savings and loan associations, the power to make commercial and consumer loans and to issue trading accounts. Designed to help the austerity industry maintain its deposit base and to increase its profitability, the 1980 Derivation of Monetary Deposit and Control (DIDMCA) allows savings to lend consumers up to 20 percent of their assets, issue credit cards, accept negotiable orders from account withdrawals from individuals and nonprofit organizations, and invest up to 20 percent of their assets in commercial real estate lending.

Damage to S & amp; L led the Congress to act, passed the 1981 Economic Recovery Tax Act (ERTA) in August 1981 and initiated regulatory changes by the Federal Home Loan Bank Board enabling S & Ls to sell their mortgage loan and use the cash earned to get better results immediately after enactment; losses incurred by the sale must be amortized over the life of the loan, and any loss can also be offset against the tax paid over the preceding ten years. This all makes S & amp; eager to sell their loans. Buyers - big Wall Street firms - quickly took advantage of the lack of S & amp; Ls, bought 60% to 90% of the value and then changed the loan by combining it as, effectively, government-backed bonds under Ginnie Mae guarantees, Freddie Mac, or Fannie Mae. S & amp; L is a group that buys this bond, holding $ 150 billion in 1986, and is being charged a huge fee for the transaction.

In 1982, the Garn-St Germain Depository Institutions Act was passed and increased the proportion of assets that could be deposited in consumer and commercial real estate loans and allowed entrepreneurs to invest 5 percent of their assets in commercial loans until January 1, 1984, when this percentage increased to 10 percent.

A large number of failures and bankruptcies of S & amp; L is happening, and S & amp; L who had been forced too hard was forced to go through the bankruptcy process itself.

The Federal Savings and Loan Insurance Corporation (FSLIC), the federal government agency that insured S & amp; L accounts in the same way Federal Deposit Insurance Corporation insures commercial bank accounts, then has to pay all the depositors whose money is lost. From 1986 to 1989, FSLIC closed or completed 296 institutions with total assets of $ 125 billion. A more traumatic period followed, with the creation of the Corporation's Trust Resolution in 1989 and the agency's resolution in mid 1995 of an additional 747 austerity.

A panel of the Federal Reserve Bank said the resulting taxpayer's bailout ended up even bigger than it should be because of moral hazard and poor selection incentives exacerbated system losses.

There's also S & amp; L the leased state failed. Some state insurance funds fail, requiring state taxpayer bailout.

State Savings Bank

In March of 1985, it came to the common knowledge that the large Cincinnati State Savings Bank in Ohio would collapse. Ohio Governor Dick Celeste announced bank vacations in the state as Home State depositors marching "run" in bank branches to withdraw their deposits. Celeste orders the closure of all S & amp; Ls state. Only those who can qualify for membership in the Federal Deposit Insurance Corporation are allowed to reopen. Claim by depositors of Ohio S & amp; L depletes the state deposit insurance fund. A similar event involving Old Court Savings and Loans takes place in Maryland.

Midwest Federal Savings & amp; Loan

Midwest Federal Savings & amp; Loans are federal deposits and loans that are based in Minneapolis, Minnesota, until their failure in 1990. The St. Paul Pioneer Press called the bank's failure to be "the biggest financial disaster in Minnesota's history".

Chairman, Hal Greenwood Jr., his daughter, Susan Greenwood Olson, and two former executives, Robert A. Mampel, and Charlotte E. Masica, were convicted of extortion that led to the collapse of the institution. The taxpayer costs a $ 1.2 billion failure.

Megadeth's song "Foreclosure of a Dream" is alleged to have been written about this particular failure. Megadeth then bassist Dave Ellefson contributed the lyrics to the song after his Minnesota family farm was in danger as a result of the financial crisis of S & L.

Savings and Loans Lincoln

The Lincoln Savings collapse led to the Keating Five political scandal, in which five US senators were involved in a peddler-effect scheme. Named for Charles Keating, who led Lincoln Savings and earned $ 300,000 as a political contribution to them in the 1980s. Three of the senators, Alan Cranston (D-CA), Don Riegle (D-MI), and Dennis DeConcini (D-AZ), found their political career cut off as a result. The other two, John Glenn (D-OH) and John McCain (R-AZ), were reprimanded by the Senate Ethics Committee for "bad judgment" for interfering with federal regulators on behalf of Keating.

Silverado Savings and Loans

Silverado Savings and Loans collapsed in 1988, taxpayers cost $ 1.3 billion. Neil Bush, son of US Vice President George H. W. Bush, was on the Board of Directors of Silverado at the time. Neil Bush is accused of giving himself a loan from Silverado, but he denies any wrongdoing.

The US Office of Goods Supervision investigated Silverado's failure and decided that Neil Bush had been involved in many "fiduciary duty violations involving multiple conflicts of interest". Although Bush is not charged with criminal charges, civil action is brought against him and other Silverado directors by the Federal Deposit Insurance Corporation; finally settled out of court, with Bush paying $ 50,000 as part of the settlement, The Washington Post reported.

As a failed austerity director, Bush decided to approve $ 100 million in what ultimately was a bad loan for his two business partners. And in voting for a loan, he failed to inform fellow board members at Silverado Savings & amp; Lend that the loan applicant is his business partner.

Neil Bush paid a $ 50,000 fine, paid for him by Republican supporters, and was banned from banking because of his role in bringing down Silverado, which weighed on taxpayers of $ 1.3 billion. An RTC lawsuit against Bush and other Silverado officers was completed in 1991 for $ 26.5 million.

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Scandal

Jim Wright

On June 9, 1988, the House Committee on Official Behavior Standards adopted an initial six-count investigation resolution representing a determination by the committee that in 69 examples there is reason to believe that Rep. Jim Wright (D-TX) violates House rules on inappropriate behavior of a Representative. A report by a special adviser implies it in a number of sales influences, such as Vernon Savings and Loan, and tries to get William K. Black fired as deputy director of the Federal Savings and Loan Insurance Corporation (FSLIC) under Gray. Wright resigned on May 31, 1989, to avoid full trial after the Official Behavioral Standards Committee unanimously approved a statement of alleged violation of 17 April.

Keating Five

On November 17, 1989, the investigation of the Senate Ethics Committee began from Keating Five, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ) Riegle, Jr. (D-MI), accused of improper intervention in 1987 on behalf of Charles H. Keating, Jr., chair of the Lincoln Savings and Loan Association.

Keating's Lincoln Savings failed in 1989, costing the federal government more than $ 3 billion and leaving 23,000 customers with worthless bonds. In the early 1990s, Keating was convicted in federal and state courts of numerous allegations of fraud, extortion and conspiracy. He served four and a half years in prison before his conviction was canceled in 1996. In 1999, he pleaded guilty to more limited set of wire fraud and bankruptcy fraud, and was sentenced when he was on duty.

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Financial Institution Reform, Recovery and Enforcement Act of 1989

As a result of the savings and loan crisis, Congress passed the 1989 Financial Institution Reform, Recovery and Enforcement Act (FIRREA), which dramatically altered its saving industry and its federal lending and regulations. Highlights of the law, signed into law on 9 August 1989, are:

1. The Federal Home Loan Bank Board (FHLBB) and the Federal Savings and Loan Insurance Corporation (FSLIC) are written off.
2. The Used Oversight Office (OTS), the US Treasury bureau, is created to charter, organize, inspect and supervise savings institutions.
3. The Federal Housing Finance Board (FHFB) was established as an independent body to replace FHLBB, which is to oversee 12 Bank Federal Home Loans (also called district banks) representing the largest collective source of home mortgage and community credit in the United States.
4. The Savings Association Insurance Fund (SAIF) replaces FSLIC as an ongoing insurance fund for austerity agencies (such as FDIC, FSLIC is a permanent company that insures savings accounts and loans up to $ 100,000). SAIF is managed by FDIC.
5. The Resolution Trust Corporation (RTC) was established to dispose of austerity institutions taken over by regulators after January 1, 1989. RTCs will make the insured deposits at those institutions available to their customers.
6. FIRREA provides additional responsibility to Freddie Mac and Fannie Mae for supporting mortgages for low- and middle-income families.

The legislation also requires S & P to meet minimum capital standards (some of which are risk-based) and increase deposit insurance premiums. This is limited to 30% of their portfolio loans not in mortgage housing or mortgage-related securities and set a standard that prevents the concentration of loans to a single borrower. This requires them to completely free themselves from junk bonds on July 1, 1994, while separating ownership of junk bonds and direct investments in separately capitalized subsidiaries.

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Consequences

Although not part of the savings and loan crisis, many other banks have failed. Between 1980 and 1994 more than 1,600 banks were insured by the FDIC closed or received FDIC financial assistance.

From 1986 to 1995, the number of federally guaranteed savings and loans in the United States declined from 3,234 to 1,645. This is primarily, but not exclusively, because of unhealthy real estate loans.

S & amps market share L for single-family mortgage loans increased from 53% in 1975 to 30% in 1990. The US General Accounting Office estimates the cost of the crisis to about $ 160.1 billion, about $ 124.6 billion paid directly by the US. government from 1986 to 1996. That figure does not include a savings insurance fund used before 1986 or after 1996. It also does not include state austerity insurance fund or state bailout.

The federal government has finally allocated $ 105 billion to settle the crisis. After the bank repaid the loan through various procedures, there was a net loss to the taxpayer about $ 124-132.1 billion at the end of 1999.

A setback in the financial industry and the real estate market may have been the cause of the economic recession of 1990-1991. Between 1986 and 1991, the number of newly built homes fell from 1.8 million to 1 million, the lowest level since World War II.

Source of the article : Wikipedia