The S&L Crisis in the Late 1970s and Early 1980s

The S&L crisis in the late 1970s and early 1980s was made much worse by

A) moral hazard, when regulators failed to close bankrupt S&Ls, which in turn caused a credit crunch.
B) adverse selection, when commercial banks were allowed to buy financially sound S&Ls but did not buy bankrupt S&Ls.
C) asymmetric information, because the government did not realize the bad financial condition of the S&Ls.
D) the regulatory dialectic.