Symposium on Federal Deposit Insurance for S&L Institutions

1989 ◽  
Vol 3 (4) ◽  
pp. 3-9 ◽  
Author(s):  
Dwight M Jaffee
Keyword(s):  
Great Depression ◽  
Commercial Bank ◽  
Deposit Insurance ◽  
Bush Administration ◽  
Bank Runs ◽  
Future Prospects ◽  
The Great Depression ◽  
Bank Deposits ◽  
Savings And Loan ◽  
Federal Deposit Insurance

Federal deposit insurance was introduced to eliminate the bank runs of the Great Depression: the FDIC (Federal Deposit Insurance Corporation) was created in 1933 to insure commercial bank deposits, and the FSLIC (Federal Savings and Loan Insurance Corporation) was created in 1934 to insure savings and loan association (S&L) deposits. Following a decade of neglect, the Bush administration and Congress moved early in 1989 to resolve the most serious problems yet to confront federal insurance of U.S. bank deposits. How did S&L losses expand so rapidly and unexpectedly? How should FSLIC be redesigned to avoid a reoccurance? Who is going to pay for the existing FSLIC losses? What are the future prospects for the S&L industry?

WaMu's Option-ARM Strategy

2014 ◽  
Vol 29 (4) ◽  
pp. 557-575
Author(s):  
Robert M. Bowen ◽  
S. Jane Jollineau ◽  
Barbara A. Lougee
Keyword(s):  
Business Strategy ◽  
Deposit Insurance ◽  
Financial Statement ◽  
Financial Analyst ◽  
The Great Depression ◽  
Savings And Loan ◽  
Federal Deposit Insurance ◽  
Loan Losses

ABSTRACT At the end of 2007, Washington Mutual, Inc. (generally known as “WaMu”) was the largest savings and loan bank in the U.S., based on assets ($328 billion) and revenue ($25.5 billion). Less than nine months later, WaMu was seized by federal regulators and sold to JPMorgan Chase for $1.9 billion in a transaction facilitated by the Federal Deposit Insurance Corporation (FDIC). During the worst recession since the Great Depression, WaMu became the largest U.S. bank failure in history. This case illustrates how a financial institution's business strategy affects risk and how these characteristics are revealed in the financial statements. Students assume the role of a financial analyst examining WaMu's 2007 10-K after its release in March 2008. In particular, they evaluate the quality of WaMu's loans and the adequacy of WaMu's estimates for loan losses, one of the most important discretionary accruals for financial institutions. Students gain insights into the consequences of WaMu's business strategy to emphasize high-margin loan products by comparing WaMu to (1) the relatively conservative Wells Fargo Bank and (2) the average large FDIC bank. This case has been used successfully in graduate-level financial statement analysis courses.

Bank Failures, The Great Depression, and Other “Contagious” Events

2019 ◽  
pp. 909-927
Author(s):  
Charles W. Calomiris
Keyword(s):  
Public Policy ◽  
Great Depression ◽  
Deposit Insurance ◽  
Policy Implications ◽  
Bank Failures ◽  
Historical Evidence ◽  
Lender Of Last Resort ◽  
Safety Nets ◽  
The Public ◽  
The Great Depression

Deposit withdrawal pressures on banks, which sometimes take the form of sudden runs, have figured prominently in the discussion of public policy toward banks and the construction of safety nets such as deposit insurance and the lender of last resort. This chapter examines historical evidence from the Great Depression, and other episodes, on the factors that prompted withdrawals, the discussion of contagious runs, and the public policy implications. The historical evidence is presented in detail and is connected to the debate over the proper roles of deposit market discipline via the threat of withdrawals, the insurance of deposits, and lender-of-last-resort support for banks facing withdrawal pressures.

scholarly journals Banking crises and the international monetary system in the Great Depression and now

2011 ◽  
Vol 18 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Richhild Moessner ◽  
William A. Allen
Keyword(s):  
Great Depression ◽  
International Monetary System ◽  
Banking Crises ◽  
Flexible Exchange Rate ◽  
Short Term ◽  
Liquidity Provision ◽  
The Great Depression ◽  
Monetary System ◽  
Bank Deposits ◽  
Rate Environment

We identify similarities and differences in the scale and nature of the banking crises in 2008-9 and the Great Depression, and analyse differences in the policy response to the two crises in light of the prevailing international monetary systems. We find that the scale of the banking crisis, as measured by falls in international short-term indebtedness and total bank deposits, was smaller in 2008-9 than in 1931. However, central bank liquidity provision was larger in the flexible exchange rate environment of 2008-9 than in 1931, when it had been constrained in many countries by the gold standard.

Back to the future: Backtesting systemic risk measures during historical bank runs and the great depression

2020 ◽  
Vol 113 ◽  
pp. 105736 ◽  
Author(s):  
Christian Brownlees ◽  
Ben Chabot ◽  
Eric Ghysels ◽  
Christopher Kurz
Keyword(s):  
Great Depression ◽  
Systemic Risk ◽  
Risk Measures ◽  
Bank Runs ◽  
The Great Depression ◽  
The Future

Bank Resolution and Crisis Management

2016 ◽  
Author(s):  
Gleeson Simon ◽  
Guynn Randall
Keyword(s):  
Deposit Insurance ◽  
Global Financial Crisis ◽  
Policy Makers ◽  
The Great Depression ◽  
Bank Resolution ◽  
The Us ◽  
Bankruptcy Code ◽  
The Uk ◽  
Federal Deposit Insurance ◽  
Financial Transactions

The 2008 global financial crisis ushered in the biggest explosion in new bank regulation around the world since the Great Depression. Governments and regulators have sought to put measures in place to prevent the failure of banks, but have acknowledged the need for measures to address what happens when banks fail or are threatened with failure. This book deals with the measures which European, US, and international law and policy-makers have sought to put in place to manage failure of financial institutions. Measures such as ‘bail-out’ (protecting private shareholders and creditors against losses) and ‘bail-in’ (imposing losses on shareholders and long-term creditors without causing contagion among short-term creditors) are discussed. The work includes summaries and commentary on the EU Bank Recovery and Resolution Directive, the UK resolution laws including the Banking Act 2009 and amendments to that Act, the Orderly Liquidation Authority under Title II of the US Dodd‒Frank Act, resolution under Chapter 11 of the US Bankruptcy Code, the proposed new Chapter 14 to the US Bankruptcy Code, and the bank resolution provisions of the US Federal Deposit Insurance Act. Special emphasis is given to the practical effect of such measures on financial transactions and their impact on arrangements, such as netting and set-off. There is also commentary on the role of depositor protection schemes and their role in returning money to the depositors in a failing bank.

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