A large number of the savings institution failures during the in the 1980s was a result of

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The savings institution failures in the 1980s were caused by a combination of interest rate risk exposure, excessively risky investments, and fraudulent behavior by managers. The savings and loan industry had invested heavily in long-term, fixed-rate mortgages at a time when interest rates were rising rapidly, which exposed them to interest rate risk. Furthermore, many institutions made risky investments in other areas, such as commercial real estate, which exacerbated their financial problems. Finally, there were cases of fraudulent behavior on the part of managers, who engaged in activities such as insider dealing and falsifying financial statements. Collectively, these factors contributed to the failures of many savings institutions in the 1980s.

A Large Number of the Savings Institution Failures During the in the 1980s