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2 Stan. L. & Pol'y Rev. 21 (1990)
A Never Ending Story - An Introduction to the S&(and)L Symposium

handle is hein.journals/stanlp2 and id is 23 raw text is: A Never Ending Story
An Introduction to the
S&L Symposium
G. Christian Hill

Despite the hundreds of articles written about the
causes and implications of the thrift debacle, it re-
mains a disaster with a continuing capacity to surprise
and confound. Several hundred savings and loan as-
sociations (S&Ls) considered likely to survive just a
year ago are now failing or distressed. Reliable esti-
mates of the total 10-year cost of resolving failed S&Ls
are now more than double the $157 billion predicted
in August 1989.
There is a widespread misunderstanding of the
history and future of this financially cataclysmic event,
partly because those responsible for it-thrift opera-
tors, regulators, accountants, and politicians, among
others-have assiduously sought to minimize and
misrepresent their contributions to the problem. They
have tended to blame each other-accurately as it
turns out-for negligence, delay, and deferral.
But this invidious process has obscured the more
fundamental flaws, in the way our financial system
operates and the way it is politically administered,
that fostered the thrift debacle. Because several of the
Mr. HiU is the San Francisco Bureat Chief of The Wall Street
Jourmal. He has covered thrift issues since 1979.

root causes of the debacle have not been addressed,
the intended solution to the crisis, the Financial Re-
form, Recovery, and Enforcement Act of 1989
(FIRREA), is no more than a stop-gap measure. More-
over, it falls far short of paying for the losses that will
actually be incurred over the next decade. FIRREA II
is apt to be near the top of Congress's political agenda
by fall 1991.
Thus, the Stanford Law & Policy Review's sympo-
sium on the thrift debacle is a particularly timely and
useful exercise. Much remains to be done in terms of
policy making and assessing causes and costs. Many
of the articles assembled here illuminate the likely
problems of the future by distinguishing between sec-
ondary and primary causes of the thrift crisis.
There is common agreement that the biggest mis-
takes leading to the thrift crisis were the decisions by
the Federal Home Loan Bank Board (FHLBB), from
1980 to 1989, to allow savings and loan associations
to operate with little or no capital, and the FHLBB's
inability to supervise these institutions as they ran
amuck. The amazing and perverse history of capital
forbearance is well summarized in the presentation of
William Black, general counsel for the Federal Home


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