The US Treasury and Congressional leadership continues to hammer out a proposal essential to restoring liquidity to the credit markets. As the debate rumbles forward, it is worth reflecting on a comparable series of events of roughly equal magnitude that found a similar solution – the savings and loan crisis.

Between 1986 and 1995, more than 1,000 insured, deposit-taking institutions with assets totalling more than $500bn were closed. Historically, S&Ls had operated under conservative financial models. But their expansion into new types of loans unfortunately coincided with newly lowered capital requirements and a period of volatile interest rates, forcing the closure of 30 per cent of these institutions.