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The thrift industry: reconstruction in progress
A review of the problems faced by the savings and loan industry, with a discussion of the effects of regulatory actions and of the difficulties caused by erosion of the industry's capital position.
AUTHORS: Buynak, Thomas M.
Local thrift competition and bank earnings
A discussion of how thrift competition affects the earnings of banks, using data from a sample of 314 banks from a 14-state area.
AUTHORS: Watro, Paul R.
Mutual-to-stock-conversions by New England savings banks: where has all the money gone?
In the aftermath of the real estate slump and the attendant financial troubles of the New England banks, it is natural to look for causes and contributing factors. One phenomenon that has received its share of the blame is the rush of conversions by thrifts in the mid 1980s from mutual to stock form of ownership. Conversions were hailed initially as a way to fortify the eroded capital of thrifts and increase their safety and soundness. ; This article compares the behavior of converted thrifts with that of the mutuals. It finds that converted institutions took greater risks, suffered bigger losses, and failed at a higher rate than the mutuals despite being very highly capitalized after conversion. Three conclusions are reached. First, converted thrifts accounted for a substantial share of the increase in real estate financing during the boom of the mid 1980s. Second, ability to take greater risk, rather than efficiency, appears to have been a dominant motive for thrift conversions in New England. And third, even very high capital ratios may not prove sufficient if an institution takes big risks in its loan portfolio.
AUTHORS: Simons, Katerina
Comment requested by May 19, 1989 on proposal regarding \\"tandem operations restrictions.\\"
Differential mortality, uncertain medical expenses, and the saving of elderly singles
People have heterogenous life expectancies: women live longer than men, rich people live longer than poor people, and healthy people live longer than sick people. People are also subject to heterogenous out-of-pocket medical expense risk. We show that all of these dimensions of heterogeneity are large for the elderly. Can these factors explain their lack of asset decumulation even at very advanced ages and the high saving rate of the income-rich elderly? We answer this question in two steps. We first estimate the uncertainty about mortality and outof pocket medical expenditures as functions of sex, health, permanent income, and age. We then formalize a rich structural model of saving behavior for retired single households, and we estimate it by using the method of simulated moments.
AUTHORS: De Nardi, Mariacristina; French, Eric; Jones, John Bailey