The economic insolvency of many thrift institutions during the 1980s was due, at least in part, to unexpected increases in interest rates.

Question

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The sudden increases in interest rates caused many thrift institutions to suffer losses on their long-term, fixed-rate mortgages while their cost of borrowing increased. This led to the insolvency of many thrift institutions.

The Economic Insolvency of Many Thrift Institutions During the 1980s