Overdrawn: The Bailout of American Savings

Beginning as a small, conservative Southern California savings-and-loan, American Savings was transformed into the nation's largest thrift, a juggernaut worth $30 billion. When its parent company, Financial Corporation of America, filed for bankruptcy in 1988, the S & L's portfolio comprised billions in bad debt. The company's chief architect was Charles Knapp, a stunt pilot whose wild-eyed growth formulas got American Savings in deeper trouble with Ed Gray, head of Reagan's ineffectual regulatory agency, the Federal Home Loan Bank Board. Bill Popejoy, who took over as the thrift's chairman, accepted a bailout in 1988 by the Bass Group, which profited handsomely from the industry's collapse and the federal regulators' abysmal failures. In a disquieting tale of corporate greed and government neglect, Robinson, former bureau chief of American Banker , places the crisis-triggering deregulation within a larger context of economic mismanagement that included years of bloated federal budgets and overexpansion. (Nov.)