MEASURING THE TRUE PROFILE OF TAXPAYER LOSSES IN THE SAVINGS-AND-LOAN INSURANCE MESS

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Title:	MEASURING THE TRUE PROFILE OF TAXPAYER LOSSES IN THE SAVINGS-AND-LOAN INSURANCE MESS
Authors:	KANE,EJ;YU,MT
Contributors:	財務金融所
Date:	1995
Issue Date:	2010-06-29 20:30:51 (UTC+8)
Publisher:	中央大學
Abstract:	This research shows that conservative methods of projecting and discounting cash flows, if applied to information already collected in the FHLBB's reporting system, would have reflected the size of the S&L deposit-insurance losses long before taxpayers were aware of the extent of the mess. Official data show FSLIC reserves of $4.6 billion in 1986. In sharp contrast, our conservative estimate puts imbedded losses for that year at $45.3 billion. These methods prove insensitive to arbitrariness in the assumptions needed to operationalize the discounting process and measure the extent of 'guilty knowledge' it is fair to presume officials possessed - supporting an incentive-breakdown theory of the problem over presumptions of innocent ignorance. The policy implication is that taxpayers need to impose on government regulatory agents a better information system and better enforcement of those agents' obligations to the public.
Relation:	JOURNAL OF BANKING & FINANCE
Appears in Collections:	[Graduate Institute of Finance] journal & Dissertation

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