A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios

This dissertation is a theoretical and empirical investigation of the actual changes in Federal S&L asset portfolios following the deregulation of the 1980's which loosened the restrictions on the amount of non-housing related lending that Federal S&L's could undertake. In particul...

Full description

Bibliographic Details
Main Author: Hudgins, Sylvia Conway
Other Authors: Finance
Format: Others
Language:en_US
Published: Virginia Polytechnic Institute and State University 2019
Subjects:
Online Access:http://hdl.handle.net/10919/87667
id ndltd-VTETD-oai-vtechworks.lib.vt.edu-10919-87667
record_format oai_dc
spelling ndltd-VTETD-oai-vtechworks.lib.vt.edu-10919-876672020-09-26T05:33:31Z A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios Hudgins, Sylvia Conway Finance LD5655.V856 1987.H833 Deposit insurance Savings and loan associations -- Law and legislation Asset-liability management This dissertation is a theoretical and empirical investigation of the actual changes in Federal S&L asset portfolios following the deregulation of the 1980's which loosened the restrictions on the amount of non-housing related lending that Federal S&L's could undertake. In particular the study focuses on the effects of deregulation and the forces promoting and constraining the individual S&L's expansion into non-housing related assets. The theoretical model provides a framework for the empirical examination of the deregulation in the DIDMCA of 1980 and Garn-St Germain Act of 1982. The theoretical model is an adaptation of the Mingo and Wolkowitz (1977) banking model. The peculiarities of the S&L industry are embodied through adaptations of the Mingo and Wolkowitz (1977) model which emphasize after-tax profit maximization (tax laws reward specialization in housing related assets), constrain diversification into non-housing related assets, and differentiate between mutual and stock associations. Using the method of Lagrange multipliers, an expression is obtained for the effect of a change in after-tax profits for a relaxation of the constraint on diversification which becomes the focus of the analysis. By integrating the Lagrange multiplier with economic and regulatory controls, systems of regressions are developed which examine the changes in asset portfolio composition for Federal associations using balance sheet and income statement data between 1979 and 1983. The findings and implications of the empirical analysis are summarized as follows: 1. The tax laws do not appear to have constrained the diversification. 2. Specialization effects with respect to housing related assets appear to have constrained the diversification into non-housing related assets. 3. Non-housing related assets and liquid assets appear to be substitutes. 4. Stock associations, on average, have expanded into non-housing related assets to a greater extent than mutual associations. 5. The changes in liability legislation appear to have restrained the diversification into non-housing related assets. 6. Large associations appear more able to acquire the expertise needed to diversify. 7. Profitability appears to be correlated with the expansion into "new products." Ph. D. 2019-02-15T21:22:10Z 2019-02-15T21:22:10Z 1987 Dissertation Text http://hdl.handle.net/10919/87667 en_US OCLC# 17336826 In Copyright http://rightsstatements.org/vocab/InC/1.0/ xiv, 207 leaves application/pdf application/pdf Virginia Polytechnic Institute and State University
collection NDLTD
language en_US
format Others
sources NDLTD
topic LD5655.V856 1987.H833
Deposit insurance
Savings and loan associations -- Law and legislation
Asset-liability management
spellingShingle LD5655.V856 1987.H833
Deposit insurance
Savings and loan associations -- Law and legislation
Asset-liability management
Hudgins, Sylvia Conway
A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
description This dissertation is a theoretical and empirical investigation of the actual changes in Federal S&L asset portfolios following the deregulation of the 1980's which loosened the restrictions on the amount of non-housing related lending that Federal S&L's could undertake. In particular the study focuses on the effects of deregulation and the forces promoting and constraining the individual S&L's expansion into non-housing related assets. The theoretical model provides a framework for the empirical examination of the deregulation in the DIDMCA of 1980 and Garn-St Germain Act of 1982. The theoretical model is an adaptation of the Mingo and Wolkowitz (1977) banking model. The peculiarities of the S&L industry are embodied through adaptations of the Mingo and Wolkowitz (1977) model which emphasize after-tax profit maximization (tax laws reward specialization in housing related assets), constrain diversification into non-housing related assets, and differentiate between mutual and stock associations. Using the method of Lagrange multipliers, an expression is obtained for the effect of a change in after-tax profits for a relaxation of the constraint on diversification which becomes the focus of the analysis. By integrating the Lagrange multiplier with economic and regulatory controls, systems of regressions are developed which examine the changes in asset portfolio composition for Federal associations using balance sheet and income statement data between 1979 and 1983. The findings and implications of the empirical analysis are summarized as follows: 1. The tax laws do not appear to have constrained the diversification. 2. Specialization effects with respect to housing related assets appear to have constrained the diversification into non-housing related assets. 3. Non-housing related assets and liquid assets appear to be substitutes. 4. Stock associations, on average, have expanded into non-housing related assets to a greater extent than mutual associations. 5. The changes in liability legislation appear to have restrained the diversification into non-housing related assets. 6. Large associations appear more able to acquire the expertise needed to diversify. 7. Profitability appears to be correlated with the expansion into "new products." === Ph. D.
author2 Finance
author_facet Finance
Hudgins, Sylvia Conway
author Hudgins, Sylvia Conway
author_sort Hudgins, Sylvia Conway
title A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
title_short A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
title_full A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
title_fullStr A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
title_full_unstemmed A theoretical and empirical analysis of the effects of deregulation in the 1980's on S&L asset portfolios
title_sort theoretical and empirical analysis of the effects of deregulation in the 1980's on s&l asset portfolios
publisher Virginia Polytechnic Institute and State University
publishDate 2019
url http://hdl.handle.net/10919/87667
work_keys_str_mv AT hudginssylviaconway atheoreticalandempiricalanalysisoftheeffectsofderegulationinthe1980sonslassetportfolios
AT hudginssylviaconway theoreticalandempiricalanalysisoftheeffectsofderegulationinthe1980sonslassetportfolios
_version_ 1719341380498620416