The recent crisis wave required two coinciding trends: expanding deposit-insurance/bailout coverage AND increased macroeconomic risk—the low-volatility 1950s-60s offered little risk to bet on, but rising inflation and business-cycle volatility from the 1970s provided risk to exploit, so the S&L crisis emerged in the late 1970s as expanding coverage met expanding risk.
causalpending
Speaker
Charles CalomirisEvidence Quote
“if you don't have some risk it's hard to bet on risk the 1950s in the 1960s were extremely low risk... in the 70s we really cranked it up where we start having some risks to bet on”
Created: 6/15/2026, 9:20:15 AM
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