The Resolution Trust Corporation was a US government owned asset management company mandated to sell assets (primarily real estate) that had been held as collateral against most of the bad loans of savings and loan associations. It also took over the insurance functions of the former Federal Home Loan Bank Board. It was created by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), adopted in 1989. In 1995, its duties were transferred to the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ... Collateral is a word used for assets that secure a loan. ... A savings and loan association is a financial institution which specializes in accepting savings deposits and making mortgage loans. ... The Federal Home Loan Banks are an essential source of stable, low-cost funds to financial institutions for home mortgage, small business, rural and agricultural loans. ... 1989 is a common year starting on Sunday of the Gregorian calendar. ... 1995 was a common year starting on Sunday of the Gregorian calendar. ... The Federal Deposit Insurance Corporation (FDIC) was created by the Glass-Steagall Act of 1933. ...
According to Joseph E. Stiglitz in his book, Towards a New Paradigm in Monetary Economics, page 243, the real reason behind the need of this company was to allow the United States government to subsidize the banking sector in a way that wasn't very transparent and therefore avoid the the possible resistance. This is supported by the fact that the banks had better information related to the loans than the RTC. Joseph Stiglitz (born February 9, 1943) is an American economist, author and winner of Nobel Prize for economics (2001). ... The government of the United States, established by the United States Constitution, is a federal republic of 50 states, a few territories and some protectorates. ... The essential function of a bank is to provide services related to the storing of value and the extending of credit. ...
The ResolutionTrustCorporation was a US government owned asset management company mandated to liquidate assets (primarily real estate-related assets, including mortgage loans) that had been assets of savings and loan associations ("SandLs") declared insolvent by the Office of Thrift Supervision.
In 1995, its duties were transferred to the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation.
According to Joseph E. Stiglitz in his book, Towards a New Paradigm in Monetary Economics, page 243, the real reason behind the need of this company was to allow the United States government to subsidize the banking sector in a way that wasn't very transparent and therefore avoid the possible resistance.
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