A major cause of the FSLIC insolvency in the 1980s was the dramatic rise in interest rates in 1979-82 that created extensive duration mismatches of assets and liabilities in the savings and loan industry.

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The dramatic rise in interest rates in 1979-82 did create extensive duration mismatches of assets and liabilities in the savings and loan industry, which was a major cause of the insolvency of the Federal Savings and Loan Insurance Corporation (FSLIC) in the 1980s.

A Major Cause of the FSLIC Insolvency in the 1980s