An investigation of the incidence of insider criminal activity in RTC resolved S & L’s

Abstract

Outlines previous research on reasons for the many failures of US thrifts and loans during the 1980s, and suggests that crime played a larger part than is generally supposed. Explains the regulatory system set up to deal with failed thrift institutions and analyses all disposals made by the Resolution Trust Corporation between 1989 and 1995, including its referrals for criminal investigation. Shows for each year and in total the proportions disposed of by insured deposit transfers, pay‐outs and purchase and assumption contracts; the value of assets/liabilities involved; and the cost of resolution to the taxpayer. Goes on to show that the failed thrifts affected by criminal activity (almost half!) accounted for almost 80 per cent of total resolution costs and were more likely to be larger institutions. Contrasts these results with previous research, recognizes the limitations of the study and calls for further investigation.

Citation

Izzo, G. and Seiler, M.J. (1999), "An investigation of the incidence of insider criminal activity in RTC resolved S & L’s", Managerial Finance, Vol. 25 No. 7, pp. 31-47. https://doi.org/10.1108/03074359910766046