Is the Savings and Loan Industry Facing Extinction?
The Secured Lender, Vol. 47, May/June 1991
Posted: 27 Mar 1999
This article discusses the S&L crisis. Proposed solutions are discussed in the context of the industry as it currently stands. With a somewhat similar liability structure to that of banks (mainly short-term deposits), the asset structure of S&Ls is quite different. Whereas banks assets consist of short-term loans, S&L assets consist largely of long-term loans, such as home ownership mortgages. Therefore, in the absence of adequate hedging measures, S&Ls are more vulnerable to interest rate risk, which can lead to lower profits when interest rates rise.
JEL Classification: G00, G20, G21, G28, G29
Suggested Citation: Suggested Citation