Failed Financial Institutions:
Reasons, Costs, Remedies, and Unresolved Issues
T-AFMD-89-1: Published: Jan 13, 1989. Publicly Released: Jan 13, 1989.
Additional Materials:
- Full Report:
Contact:
GAO discussed: (1) characteristics and management practices of failed financial institutions; (2) the Federal Home Loan Bank Board's (FHLBB) recent resolution actions; and (3) actions to prevent the crisis from recurring. GAO found that: (1) in 1987, 203 commercial banks closed at an estimated net cost of $3 billion and, in 1988, the number increased to 221; (2) in 1988, the Federal Savings and Loan Insurance Corporation (FSLIC) acted on 222 problem institutions at a cost of $37 billion and left 350 insolvent thrifts still operating; (3) based on a $27-billion resource estimate to pay for insurance losses, FSLIC would need an additional $50 billion to pay for insurance losses through 1998; (4) many thrifts failed because of internal control weaknesses, over-reliance on volatile funding sources, poor loan administration, appraisal deficiencies, and insider fraud and abuse; (5) FHLBB budget constraints imposed staffing and pay limits and forced it to handle only critical situations and turn examinations over to district banks; (6) FHLBB was prevented from liquidating many insolvent thrifts due to the FSLIC financial condition and began to rely on finding merger partners for troubled thrifts; (7) FHLBB had uncertain regulatory control over state-chartered thrifts; and (8) the dual roles of FHLBB and district banks hampered regulation. GAO believes that Congress needs to consider: (1) containing and resolving the immediate FSLIC financial crisis; and (2) establishing an independent FSLIC to insure, regulate, and supervise the thrift industry.
Jun 28, 2018
U.S. Postal Service:
Projected Capital Spending and Processes for Addressing Uncertainties and RisksGAO-18-515: Published: Jun 28, 2018. Publicly Released: Jun 28, 2018.
Jun 21, 2018
-
The Nation's Fiscal Health:
Action Is Needed to Address the Federal Government's Fiscal FutureGAO-18-299SP: Published: Jun 21, 2018. Publicly Released: Jun 21, 2018.
Apr 3, 2018
-
Defense Budget:
Actions Needed to Improve the Management of Foreign Currency FundsGAO-18-221: Published: Apr 3, 2018. Publicly Released: Apr 3, 2018.
Feb 6, 2018
-
Budget Issues:
Continuing Resolutions and Other Budget Uncertainties Present Management ChallengesGAO-18-368T: Published: Feb 6, 2018. Publicly Released: Feb 6, 2018.
Oct 12, 2017
-
Public Relations Spending:
Selected Agencies' Activities Supported by Contracts and Public Affairs StaffGAO-17-711: Published: Sep 12, 2017. Publicly Released: Oct 12, 2017.
Oct 2, 2017
-
U.S. Territories:
Public Debt OutlookGAO-18-160: Published: Oct 2, 2017. Publicly Released: Oct 2, 2017.
Sep 20, 2017
-
Budget Issues:
Budget Uncertainty and Disruptions Affect Timing of Agency SpendingGAO-17-807T: Published: Sep 20, 2017. Publicly Released: Sep 20, 2017.
May 3, 2017
-
The Nation's Fiscal Health:
Action is Needed to Address the Federal Government's Fiscal FutureGAO-17-579T: Published: May 3, 2017. Publicly Released: May 3, 2017.
Jan 18, 2017
-
Overseas Contingency Operations:
OMB and DOD Should Revise the Criteria for Determining Eligible Costs and Identify the Costs Likely to Endure Long TermGAO-17-68: Published: Jan 18, 2017. Publicly Released: Jan 18, 2017.
Jan 17, 2017
-
The Nation's Fiscal Health:
Action is Needed to Address the Federal Government's Fiscal FutureGAO-17-237SP: Published: Jan 17, 2017. Publicly Released: Jan 17, 2017.
Looking for more? Browse all our products here
Explore our Key Issues on Budget and Spending
Explore our other Key Issues here
