Question

How did government deregulation affect savings and loans banks?

a. Government deregulation led to low interest rates.
b. Government deregulation allowed savings and loan banks to thrive.
c. Government deregulation caused several savings and loans banks to fail.
d. Government deregulation led to creation of thousands of new savings and loans banks.

Answer 1

The answer is c. Government deregulation caused several savings and loans banks to fail. This was caused by the limits that were imposed on interests and loans of banks. Other factors that contributed to the failure were the risks in such products like adjustable rate mortagages.