Banking Reform

Abstract

If the US economy has performed so remarkably for seven years, its banking system has surely been an embarassment. How can an economy that has grown consistently for more than seven years have a banking system in such disarray? In 1988, the sixth year of an expansion, the economy generated 3.6 million new jobs — over 300 000 each month.² In the same period, 200 commercial banks failed — a post-war record. Concomitantly, 12 per cent of the nation’s savings and loans were insolvent according to generally accepted accounting principles. The nation’s thrift industry is being all but nationalised in the process.