The FDIC has a chronology of the Savings and Loan crisis on its website. I think they do a pretty good job of highlighting all the key points without slanting things for political purposes. See the link at the end of the post for the chronology.
The S&L crisis bears keeping in mind as many comparisons to that period regarding deregulation, risk, and bailouts are now being made. One note about the S&L crisis that I should make is that relaxing accounting rules caused the crisis to mushroom in size. And this bears noting as the onerous FAS 157 is creating quite a stir right now. Basically, the accounting rule mandates marking-to-market of various securities.
I am sympathetic to calls to relax the rule as it is pro-cyclical, meaning it naturally swings along with the business cycle. Marking to market causes balance sheets to be inflated during booms like the one we just had and it may cause them to be artificially deflated during busts like the present one.
However, experiences like the Savings and Loan crisis show that relaxing accounting rules in order to bail out financial institutions is probably a bad idea and leads to much greater losses. It is better to take the losses in the first place and move on.
So, it remains a dilemma as to how we can regulate FAS 157’s pro-cyclicality while safeguarding our financial system. I don’t have the answer. But, expect to hear much more about this rule going forward.
S&L Crisis Chronology
The S&L Crisis: A Chrono-Bibliography, FDIC
FAS 157
Summary of Statement No. 157: Fair Value Measurements – FASB