What was one cause of the Savings and Loan crisis in the 1980s?
A. not enough gold to back loans
B. losses from risky loans
C. too much regulation
D. defaults on sub-prime mortgages

Respuesta :

lr1265
High interest rates, the deregulation of the banking industry, and bad loans were the causes of the Savings and Loan crisis in the 1980s. I would choose B.

Correct answer:

B. losses from risky loans

One of the reasons for the savings and loan crisis in the 1980s was the implementation of new investment powers, thus introducing new risks and speculative opportunities that were difficult to administer and of which there was no experience.

In addition, the volume of the loan did not have a good administration. An example of this was non-residential construction loans.

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