LINCOLN SAVINGS AND LOAN SCANDAL

Because the Lincoln Savings and Loan collapse has been (thus far) the most expensive to the federal government of the thrift institution failures in the current savings and loan crisis, and because five sitting United States senators were implicated in attempts to shield Charles Keating (the chief executive officer at Lincoln Savings and Loan) and the institution from federal banking investigators, the case writer implies that the Lincoln Savings and Loan case is somehow different from most of the other thrift institution failures in the current crisis. In fact, in terms of root causes of the problem, the only essential difference between the Lincoln Savings and Loan failure and most of the other thrift institution failures is the monetary magnitude of the loss at Lincoln Savings and Loan. The case writer also displays a naivete and superficiality of analytical approach in the phrasing of the question of responsibility for the failure at Lincoln. The approach is superficial in that contemporary conditions and overt actions are emphasized at the expense of the underlying shift in governmental philosophy that permitted the contemporary conditions and overt actions to occur. The approach is naive because the minimal reference made by the case writer to the underlying shift in governmental philosophy implied that such change could be laid at the doorstep of the Congress, with no mention of th

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Both the regulatory structure, and the structure of the country's financial system were transformed through the implementation of the two banking decontrol acts. Among other things, the acts removed most interest rate ceilings, and the prohibition against the paying of interest on checkable accounts was lifted. The banking decontrol acts also expanded the types of financial institutions (1) for which mandatory membership in the Federal Reserve System was required, or (2) to which regulation by the System was extended (Timberlake, 1985, p. 98). As a result, many statechartered commercial banks and most thrift institutions were required to maintain reserve accounts with the System, and, as well, these institutions gained access to the System services. In 1989 (the year in which the federal government seized Lincoln Savings and Loan), the banking and finance industry was well into the eighth year of deregulation. At that time, there existed some blurring of the functions of the major players in the industry, as well as the presence of many new players. As an example, the activities of commercial banks and investmenttype institutions overlapped to a greater extent than was true prior to regulatory revision. The distinctio
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Some common words found in the essay are:
Savings Loan, Reagan Administration, Alan Greenspan, Administrations United, Administration Congress, Bush Administration, Administration American, Klaman Rubison, United Federal, Corporation FDIC, savings loan, savings loan crisis, loan crisis, lincoln savings loan, lincoln savings, deposit insurance, banking financial, federal deposit, bush administration, federal deposit insurance, thrift institutions, thrift institution, commercial banks, thrift institution failures, commercial bank failures,
Approximate Word count = 2783
Approximate Pages = 11 (250 words per page)

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