The thrift crisis of the 1980s was caused by a combination of unsound lending practices and inadequate interest rate risk management.

Question

Quizplus · Accepted Answer

The thrift crisis of the 1980s was indeed caused by a combination of unsound lending practices, particularly in the real estate sector, and inadequate interest rate risk management, which left many savings and loan associations (thrifts) exposed to rapidly rising interest rates. This led to significant financial losses and numerous institution failures.

The Thrift Crisis of the 1980s Was Caused by a Combination