Banking 1989: Not quite a twice-told tale
In some ways, U.S. bank
performance in 1989 seemed
a replay of 1987. Less developed
countries (LDC) loan
provisions at larger banks, a
swift equity market correction, and dramatically
weakening real-estate markets in distinct
geographic regions left analysts borrowing
adjectives and analyses from two years prior.
But similar as events were to 1987's, 1989 put
its own particular twist on things. Indeed, it is
the structural differences in the banking environment
between 1987 and 1989 that have
been most instructive. These ongoing changes
include the passage of the Financial Institutions
Reform, Recovery and Enforcement Act
(FIRREA) and the new risk-based capital
guidelines.
