Question: The federal government 1 encouraged the development of the savings

The federal government (1) encouraged the development of the savings and loan industry, (2) virtually forced the S&L industry to make long-term, fixed- interest-rate mortgages, and (3) forced S&Ls to obtain most of their capital as deposits that are withdrawable on demand.
a. Would the S&Ls be better off if rates are expected to increase or to decrease in the future?
b. Would the S&L industry be better off if the individual institutions sold their mortgages to federal agencies and then collected servicing fees or if the institutions held the mortgages that they originated?

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  • CreatedNovember 24, 2014
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