Word: thrifts
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Dates: during 1980-1989
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...depositors and carry out the bailout, which is expected to cost more than $150 billion in the next ten years. Moreover, the Government has never proved to be an entrepreneurial manager of property, so the real estate it owns is likely to keep diminishing in value. Says thrift consultant William Ferguson: "Bad assets don't usually get better, they get worse. Buildings and sites deteriorate...
Dwarfing all other government bailouts, the plan approved yesterday would provide at least $157 billion over the next decade--most of it from taxpayers--to close or merge 350 failed thrift institutions and make good on government pledges in the rescue of 200 others last year...
...would also reorganize the regulatory bureaucracy, provide $50 million a year for the Justice Department to pursue fraud in S&Ls and enact other reforms, chief among them a requirement that thrift owners back their lending with more of their own capital...
Instead of liquidating insolvent S & Ls, regulators decided it would be cheaper and more expedient to sell them to private investors or merge them with healthy thrifts. Bank Board Chairman M. Danny Wall sharply stepped up the tempo of such sales last year, selling or liquidating more than 200 thrifts at an estimated cost to the Government of $39 billion in tax breaks and other incentives extended to the buyers. Critics contend that the regulators were taken for a ride. Fumed Iowa's Leach: "The dealmakers are laughing all the way to the piggy bank." But Wall staunchly defends...
...thrift industry that survives the coming decade will probably look very different from what it is today. Says Jonathan Gray, who follows the industry for the Sanford C. Bernstein investment firm: "If there's one word to describe the industry's future, it's turmoil." Gray envisions a severe industry shake-out. In just a decade, he points out, the number of U.S. thrifts has already fallen from 4,200 to less than 3,000. By the late 1990s, he predicts, there will be just 1,000 left...