Rating
The Pequod Review:
The Savings & Loan Scandal of the 1980s is an enormously underappreciated event in modern economic history. Despite a cost to US taxpayers of $100-200 billion dollars (or $235-470 billion in 2019 dollars), the industry's collapse disappeared down the memory hole and is mostly remembered as a minor political scandal with few broader implications. Martin Mayer’s book The Greatest-Ever Bank Robbery is one of the few thorough accounts of the scandal's root causes, which include financial deregulation (primarily led by Democrats in the pre-Reagan period), poor accounting oversight, consultants who were willing to lend their reputations in support of criminal actors (Alan Greenspan comes off especially badly), and the moral hazard of deposit insurance. This is a history that still has relevance today as we grapple with how best to regulate the financial sector.