The Reporter and His Industry

The life of veteran financial journalist Stan Strachan and his newspaper, the National Thrift News both traced the broader arc of the savings-and-loan industry from the mid-1970s through the early 1990s; the industry prospered due to a post-World War II housing boom but foundered in the mid-1970s as a result of regulatory strictures and rising inflation; federal deregulatory policies used to revive the industry backfired, triggering the collapse of thousands of thrifts. The roots of Strachan’s traditional journalistic training and idealization of U.S. society were central to his reputation for journalistic independence. He used his close contact with the industry to advance the newspaper’s journalism; insider knowledge allowed reporters to break important stories.

Discretionary justice

Purpose – The purpose of this paper is to understand the reasons why some financial crises do not result in extensive criminal prosecutions. Design/methodology/approach – The authors examine three major events: the crash of 1929 leading to the Great Depression, the collapse of the US Savings and Loan industry circa 1990 and the sub-prime mortgage meltdown. The authors explain how circumstances surrounding these financial collapses led to stark differences in criminal prosecutions. Findings – This review of prosecutions during three financial crises underscores the contingent nature of seeking criminal penalties for financial wrongdoing. The decision is influenced by a number of factors, including a prosecutor’s level of risk tolerance (probable win test); the potential economic impact of a successful conviction; the number of laws and regulations available in the prosecutorial tool kit; and the desired outcome which can range from new regulatory structures, to prosecutions that fix blame and satisfy the desire for scapegoats, to seeking financial penalties that shore up the government’s bottom line. Research limitations/implications – This study covers three crises and focuses on the US responses. A broader study could look across countries. Practical implications – Regulators and lawmakers are interested in avoiding future crises. Because crises are not anticipated, responses are determined by conditions of the moment. A frequent result is that laws and regulations are not in place. Decisions about likely preferred responses would allow anticipatory legislation and regulations. Social implications – Financial crises obviously have major implications for ordinary citizens far removed from the centers of finance. Improved responses to mitigate or avoid disasters would have profound impacts on people’s quality of life. Originality/value – The three crises have been studied individually. This work is different in that it examines the impact of a common set of factors over three crises covering a span of 80 years.

The Link Between Monetary Policy And Savings And Loans

This paper examines the effects of monetary policy on the Savings and Loan industry as measured by several accounting proxies of net worth. To accomplish this task, the paper employs two monetary measures along with four accounting measures of capital. The empirical results suggest that the growth of the money supply is a good leading economic indicator of the future health of the industry as measured by several net worth accounting measures.

Disclosure Practices In The Savings And Loan Industry: A Test Of The Signaling Hypothesis

Savings and loan institutions (S&Ls) have been able to use specialized regulatory accounting practices (RAP) which typically are more liberal than generally accepted accounting principles (GAAP). This paper examines whether differences exist between S&Ls which disclosed a reconciliation of their RAP and GAAP net worths and S&L which did not. It is predicted that the financially strongest S&Ls would be most likely to disclose this information. Reported results support this signaling hypothesis.