소개글
[투자론] 저축은행의 번성과 쇠퇴(영문)에 대한 자료입니다.
목차
Similar Kind of Crisis in Overseas : S&L Crisis
Outbreak of S&L Crisis
Resolution of the Crisis
The Cost of the Savings and Loans Crisis
Conclusion
본문내용
Problem developed when the government raised interest rates to contain inflation. Paul Volcker of FRB led retrenchment policy, aiming to reduce inflation. This policy raised interest rate to up to 19% and caused inflation rate of 13.5% (1981) plunge to 3.2%(1983). Therefore, steep increase of interest rate put people with housing loan unable to redeem their loan. Since they were unable to replay their debt, asset seizure occurred followed by bankruptcy of S&L banks and downfall of real-estate price.
In short, based upon deregulation, the crisis began from high savings rate competition and moved to high risk, high return investment. The administration also loosed supervision upon S&L banks due to lobbying. However, the problem became too sever to conceal and Paul Volcker decided to deal with this matter with high interest rate. While the policy worked in containing inflation, depression in market &and economy occurred. In the end, wide spread of insolvency was inevitable.
Resolution of the Crisis
US government had to spend public fund to deal with the Crisis.