‘The Savings Scandal’
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The recent bailouts of a large number of near-insolvent savings institutions raise questions in my mind about the effectiveness of the government’s supervisory role over this important part of our financial structure.
How is it possible that losses on bad loans of such magnitude as reported could have occurred? It would seem that good and thorough inspection and supervision could have brought any bad policies and practices to light before they could create disaster.
Could this be another example of relaxed controls introduced in the Reagan Administration? We all remember the repeated promises to get government off the back of business.
The present collapse of such a high percentage of savings and loans offers proof of the fallacy of that laissez faire policy.
JOHN C. DAVIS
Irvine
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