Origins of the thrift and banking problems in recent past are due to mismanagement of interest rate, credit risks, deposits insurance, legislative and political causes.

Before 89’ savings institutions were primarily regulated by the Federal Home Loan Bank Board

A repurchase agreement is a Liability and a reverse repurchase agreement is an asset

Long maturity investments for a bank are Us T bonds, agency securities, Mortgage backed securities

Municipal bonds is paying .06 annual coupon, an equivalent risk bond is paying .07, investors in a tax bracket of (.07(1-x)=.06, 14.28%

AU- measures the banks ability to generate income from assets, control assets

Equity to assets ratio--- 15% of equity to asset ration, can lend out. Ex. 15%*10%equity ratio

Financial services Modernization act led to interstate banking in the US

Deposit insurance reduces bank runs, helped cause the insolvency of the FSLIC, induced moral hazard at DIs

Term life insurance policy does not have a savings feature, Whole life, Variable life, and universal life do

Interest on annuities is not taxed until the investo

Some topics in this essay:
Insurance Commissioners, IRS Annuities, Provision Loan, Bank Board, Savings Ass, Fund Insolvencies--The, Income/Total Assetsâ€profit, CH15 Insurance, Forward Purchases, Review Managing, savings ass, investment banking, insurance fund, operating income, savings institutions, securities firms, bank insurance fund, term life, 2 major, variable life, balance sheet, savings ass insurance, expense/total operating income, services modernization act,