Taxpayer subsidies in failed thrift resolution: the impact of FIRREA
Article Abstract:
Passage of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) in August 1989 gave way for the relegation of chartering, insurance and failure resolution function of thrifts to other government agencies such as the Resolution Trust Corporation (RTC). Generally, institutional changes provided under the FIRREA pan out significant improvements in conducting resolution processes for failed thrifts. However, results gathered from data before and after the imposition of FIRREA suggest that the RTC made no substantial contributions in acquiring excess returns on average.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1997
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Asset returns and economic disasters: evidence from the S&L crisis
Article Abstract:
Depositors lost their trust on the Federal Savings and Loan Insurance Corp. (FSLIC) during the two years before the passage of the Financial Institutions Reform, Recovery, and Enforcement Act, which recapitalized the deposit insurance fund in 1989. Cross-sectional analysis is used to determine both the probability and the conditional price of risk associated with FSLIC default. Findings indicate that increased uncertainty about both output and inflation increased the price of FSLIC default risk to very high levels.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1995
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FSLIC assistance and the wealth effects of savings and loan acquisitions
Article Abstract:
A study was conducted to determine the effect of FSLIC-assisted (Federal Savings and Loan Insurance Corp) thrift mergers on acquiring firm shareholders. It is shown that acquiring companies exhibited positive abnormal returns upon reception of merger information. Returns were greater for firms who enjoyed direct assistance from the FSLIC. These results imply a wealth transfer effect for concerned firms.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 1993
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