The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: quot;to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund.quot; Yet performance of the regulators in achieving this...

Fannie Mae and Freddie Mac are government-sponsored enterprises that are central players in U.S. secondary mortgage markets. Over the past decade, these institutions have amassed enormous mortgage- and non-mortgage-oriented investment portfolios that pose significant interest-rate risks to the...

This paper examines the policy issues with respect to resolving the possible failure of housing enterprises Fannie Mae or Freddie Mac. The authors compare and contrast these issues with those raised in the context of large bank failures and also identify important differences in the extant...

The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: quot;to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund.quot; Yet performance of the regulators in achieving this...

This paper examines the implications that alternative regulatory structures may have for resolving failed banking institutions. We place our emphasis on the European Union (EU), which is both economically and financially large and has several features relating to cross-border banking in the form...

Agency theory is used to evaluate how the European Union (EU) may deal with the resolution of goal and agency conflicts in dealing with failing financial institutions. Experience in the United States suggests that the financial and regulatory structure being put in place, which relies upon...

This study analyzes the performance of Texas commercial banks specializing in mortgage lending during the late 1980s and early 1990s to investigate how representative was their experience as compared with that of banks across the country concentrating in real estate lending. The results show...

In this paper, the relation between bank risk-taking and operating efficiency is investigated in a simultaneous equations setting. While inefficiency is found to have positive effects on both credit risk and interest rate risk, it also has a positive effect on capitalization. The positive effect...

This study uses a two-factor market-model to estimate excess returns around 43 announcements of FSLIC-assisted thrift mergers and 66 announcements of unassisted thrift mergers. These estimated excess returns are then used to test hypotheses about asymmetric-information and principal-agent...

Agency theory suggests that many of the costs incurred by the taxpayer during the 1980s thrift crisis were the result of conflicts between principals and their agents. This study models thrift failure costs as a function of three distinct types of agency conflicts: conflicts between creditors...