Bill Isaac, who was head of FDIC at time of savings and loan turmoil and managed the collapse of what was then the seventh-largest bank in the country, Continental Illinois, said that priority was misguided.
“I don’t think it is right to sell a failed bank to the largest bank in the country just because it paid the highest price,” he said.
Based on his experiences in the 1980s S&L crisis, when rising interest rates contributed to the failure of more than 3,000 banks and savings and loans associations including eight of the 10 largest banks in Texas, Isaac said he believed there was more pain to come.
“We are kidding ourselves if we think there are only four problem banks in the country,”
FT 4 May 2023
During the late 1980s, nearly a third of the nation’s savings and loan associations failed, ending with a taxpayer bailout — in 2021 terms — of about $265 billion.
The Savings and Loans Bailout
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