SAVINGS AND LOAN ASSOCIATION

(savings and loan association) American version of the English building society. Usually involves the provision of loans at a fixed interest rate. It is a more flexible investor than the English one.

Business. Dictionary. - M.: "INFRA-M", Publishing house "Ves Mir". Graham Bets, Barry Brindley, S. Williams and others. General edition: Doctor of Economics Osadchaya I.M.. 1998 .

See what "SAVINGS AND LOAN ASSOCIATION" is in other dictionaries:

Savings and Loan Association- An institution at the national or state level that hosts savings deposits and investing the bulk of the funds in mortgage loans ... Investment dictionary

savings and loan association Technical Translator's Handbook

A non-bank financial institution engaged in the accumulation and investment of funds. Funds collected mainly from individuals are invested in the purchase of securities, short-term lending, leasing operations etc.… … Glossary of business terms

Non-banking financial institution, accumulating and diversifying funds mainly from private individuals. The association invests its funds for various purposes: leasing deals buying government securities, short term loan… … Big accounting dictionary

ASSOCIATION, SAVINGS AND LOAN- a non-banking financial institution that accumulates and diversifies funds primarily from private individuals. The association invests its funds for various purposes: leasing transactions, the purchase of government securities, a short-term loan ... ... Big Economic Dictionary

Savings bank- SAVINGS BANK A financial institution that accumulates household deposits and invests the accumulated funds in stocks, bonds and government securities. In the UK, these functions are performed by the National savings bank(National Savings... Dictionary-reference book on economics

Guarantor program- As part of the program of the Federal Housing Corporation mortgage loan, aggregation by a single issuer (usually a savings and loan association) in order to form the necessary pool for issuance as personal checks under guarantee ... ... Investment dictionary

Federal credit agencies- Federal government agencies established to provide loans to various organizations such as the Savings and Loan Association, small commercial companies, and individuals such as students, farmers and exporters ... Investment dictionary

Bank of Japan- (Bank of Japan) The Bank of Japan is the central bank of Japan whose purpose is to ensure price stability and stability financial system Japan Bank of Japan: monetary system Japan, law on national banks, the emergence of banking ... ... Encyclopedia of the investor

Introduction

The task of financial intermediaries is to overcome such difficulties in the interaction between the lender and the borrower. They buy direct claims from the borrower and convert them into indirect claims that have other characteristics (maturity, face value), which are then sold by creditors. This process of transformation is called mediation. Firms specializing in this type of activity are called financial intermediaries or financial institutions. .

Please note that the balance of a financial intermediary is determined only by financial requirements: indirect (secondary) requirements are the source of its funds (reflected in liabilities), and the attracted resources are used to purchase direct (primary) requirements (reflected in assets). Note also that with indirect financing, the creditor's assets do not contain claims on the borrower, as in direct financing, but on the financial intermediary. The indirect lending market has all the features of the retail market, and indirect financial requirements often get their own names, savings accounts or fund shares money market.

Savings and Loan Institutions.

savings and loan associations. (on the example of the USA)

savings and loan associations are credit partnerships established to finance housing construction. Their resources consist mainly of the contributions of shareholders representing the general population. In the USA, for example, any member of an association can get a vote for every $100 of his account in the election of the governing body of the association.

Although savings and loan associations began about 150 years ago, they really developed after the Second World War. The basis of their activities is the provision of mortgage loans for housing construction in cities and rural areas. Active operations mainly consist of mortgage loans and loans, which account for 90%, as well as investments in government securities (central government and local authorities).

AT last years savings and loan associations represent serious competition to commercial and savings banks in the struggle to attract savings from the population. This is achieved by establishing high percentage, a also as a result of the desire of the population to solve the housing problem with the help of these institutions. Currently, the number of shareholders of associations is several tens of millions.

Savings and loan associations are mainly cooperative in nature, as they are based mainly on the contributions of shareholders. These institutions operate under this name in the USA and Canada. In England and a number of countries of the British Commonwealth they are called building societies. In the countries of Western Europe and Japan, savings and loan associations operate both on a cooperative basis and with the participation of the state.

Savings and loan associations and building societies are serious competitors of banks, insurance companies in providing mortgage loans. It should be noted that, in general, savings and loan associations dominate the housing mortgage market. As a rule, their services in Western countries are mainly used by the middle strata of the population.

The aggravation of liquidity problems in the market in the late 1970s and early 1980s in the United States sharply worsened the position of savings and loan associations. Thus, in the mid-80s there were 3,400 associations, and by now half have been forced to go through the process of mergers, acquisitions and bankruptcies. In addition, in order to survive, they switched to wide corporatization, abandoning the former cooperative form of ownership, in which the capital belonged to the contributors (depositaries) of the association. During the transition to the joint-stock form, the owners - investors had the opportunity to buy shares on favorable conditions. These changes, as well as the diversification of operations, radically changed the structure of passive and active operations of savings and loan associations, as evidenced by their balance sheet (Table No. 2).

Table number 2

Savings and loan association balance

Table data. No. 2. indicate that in the passive operations of associations there appeared new article. First of all, the place of cooperative shares was firmly occupied by equity, which began to be based largely on equity capital. Associations began to accept savings and term deposits(the latter in small sizes), which brought their passive operations closer to passive operations commercial and savings banks. In the structure of active operations, the share of mortgage loans also decreased from approximately 90% of assets to 45.9%. At the same time, investments in private and state securities increased, and other assets increased.

At the same time, the problem of liquidity for the association is becoming more and more acute, because, like banks, they have less liquid assets than liabilities. As a rule, liabilities are of a short-term nature, and lend, on the contrary, for long term. This was considered the absolute norm in the United States. Therefore, in order to stimulate housing construction, the Central Bank (Fed) until 1980 gave associations a benefit in the form of charging an interest rate 0.25% more than commercial banks. For a long time this was enough for associations to provide the necessary inflow Money for myself. However, market fluctuations interest rates upward forced shareholders and savers to sell their shares for cash and invest in other areas, such as money market mutual funds, which caused a massive outflow of funds from associations. This had a devastating effect on associations, the mortgage market, and ultimately led to a decline in housing construction and the overall American economy during that period.

The deregulation policy of the early 1980s allowed the associations to compete more effectively in the market to raise funds, but their portfolio was weighed down by mortgages from the 1950s and 1960s and low percentage 70s. As a result, associations had to pay more on liabilities than they received on assets, which caused large losses and undermined liquidity. From 1980-1987 30% of the total number of associations either went bankrupt or was forced to merge.

Under these conditions, the associations were forced to resort to a new market strategy, trying to get closer in operations to commercial banks through diversification. They began to practice the issuance of commercial and consumer loans, to formalize debts securities and sell them on the secondary market, and convert savings accounts into urgent ones.

Savings and loan associations are credit partnerships created to finance housing construction. Their resources consist mainly of the contributions of shareholders representing the general population. In the USA, for example, any member of an association can get a vote for every $100 of his account in the election of the governing body of the association.
Although savings and loan associations began about 150 years ago, they really developed after the Second World War. The basis of their activity is the provision of mortgage loans for housing construction in cities and towns. countryside. Active operations mainly consist of mortgage loans and credits, which account for 90%, as well as investments in government securities (central government and local governments).
In recent years, savings and loan associations have been a serious competitor to commercial and savings banks in the struggle to attract savings from the population. This is achieved by setting a high percentage, as well as as a result of the desire of the population to solve the housing problem with the help of these institutions. Currently, the number of shareholders of associations is several tens of millions.
Savings and loan associations are mainly cooperative in nature, as they are based mainly on the contributions of shareholders. Under this name, these institutions operate in the United States, Canada. In England and a number of countries of the British Commonwealth they are called building societies. In the countries of Western Europe and Japan, similar institutions operate both on a cooperative basis and with the participation of the state.
Savings and loan associations and building societies are serious competitors of banks and insurance companies in providing mortgage loans. It should be noted that, in general, savings and loan associations dominate the housing mortgage market. As a rule, their services in Western countries are mainly used by the middle strata of the population.
Exacerbation of the liquidity problem in the market in the late 70s - early 80s. in the United States has sharply worsened the situation of savings and loan associations. So, in the mid-80s. there were 3400 associations, and by now half of them have been forced to go through the process of mergers, acquisitions and bankruptcies. In addition, in order to survive, they went on a wide corporatization, abandoning the former mutual form of ownership, which for many years was a cooperative form owned by its depositors (depositaries). During the transition to the joint-stock form, the owners - investors had the opportunity to buy shares on favorable terms. These changes, as well as the diversification of operations, caused a radical change in the structure of passive and active operations of savings and loan associations, as evidenced by their balance sheet (see Table 1.2).
Table 1.2
US Savings and Loan Balance Sheet Liabilities Proc. Active Operations Equity
4.5 Cash and funds invested in securities 14.5 Savings and term deposits 77.7 Mortgages

45.9 Borrowed funds 16.2 Securities secured against real estate 12.3 Other 1.6 Other 27.3 Total 100
100
As the data in the table show, a new article has appeared in the passive operations of associations. First of all, the place of cooperative shares was firmly taken by own capital, which began to be based largely on equity capital. Associations began to accept savings and time deposits (the latter are made in small amounts), which brought their passive operations closer to those of commercial and savings banks. In the structure of active operations, the share of mortgage loans also decreased from approximately 90% of assets to 45.9%. At the same time, investments in private and government papers, other assets increased.
At the same time, the liquidity problem for associations is becoming more acute, since, like banks, they have assets that are less liquid than liabilities. As a rule, they borrow for short periods, and lend, on the contrary, for long ones. This was considered the absolute norm in the United States. Therefore, in order to stimulate housing construction central bank(Fed) until 1980 gave them a benefit in the form of charging an interest rate of 0.25% more than commercial banks. For a long time this was enough for the associations to generate a real cash flow for themselves. However, upward fluctuations in market interest rates forced shareholders and savers to sell their shares for cash and invest in other areas, such as money market mutual funds, which caused a massive outflow of funds from associations. This had a devastating effect on associations, the mortgage market, and ultimately led to a decline in housing construction and the overall American economy.
Deregulation policy in the early 80s. allowed associations to compete more effectively in the market for raising funds, but their portfolio was burdened with mortgages dating back to the 1950s and 1960s. and the low percentage of the 70s. As a result, associations had to pay more on liabilities than they received on assets, which caused large losses and undermined liquidity. From 1980-1987 30% of the total number of associations either went bankrupt or was forced to merge.
Under these conditions, the associations were forced to resort to a new market strategy, trying to get closer in operations to commercial banks through diversification. They began to practice the issuance of commercial and consumer loans, to formalize debts with securities and sell them on secondary market and convert savings accounts into urgent

A variety of credit institutions involved in the accumulation of savings of the population and long-term lending for the purchase and construction of residential buildings. Such associations appeared in the USA in 1831 on the model of English building societies and subsequently became widespread.

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- An American version of the English building society. Usually involves the provision of loans at a fixed interest rate. Is a more flexible investor than the English building society...
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- a kind of credit institutions that accumulate the savings of the population and long-term lending for the construction and purchase of residential buildings ...
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- see SAVINGS BANKS...
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- credit institutions, serve mainly to attract monetary savings and free cash resources of the population ...
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Spelling Dictionary of the Russian Language
- ...
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- ss "conveniently saved" ...
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- adj., number of synonyms: 1 savings and loan ...
Synonym dictionary

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Savings and loan associations are credit partnerships created to finance housing construction. Most of the associations were organized after the Second World War to promote the expansion of housing construction.

Savings and loan associations are chartered by either the federal or state governments to open.

Initially, most associations functioned on the basis of "mutual" ownership, i.e. was a company owned by its investors. Subsequently, most of the associations switched to a joint-stock form of ownership.

Savings capital is the main liability item of savings and loan associations. the association traditionally accepts savings deposits from individuals and then makes loans to savers to buy a home.

Active operations have a strong specialization in issuing loans secured by real estate. In addition, savings and loan associations have the right to invest part of their assets in commercial, agricultural and consumer loans. Associations can open checkable deposits for their members, as well as traditional savings and term deposits.

Until 1980, the Fed's "Q" instruction allowed savings and loan associations to pay interest rates to their depositors/depositors 1/4 percentage point higher than commercial banks, which certainly contributed to a stable cash flow to the associations.

However, in those periods when market rates of interest significantly outgrew the upper level of interest rates on savings deposits, there was a significant outflow of funds from savings and loan associations. The outflow of funds has increased even more with the development mutual funds money market, which offered a much more liquid savings mechanism with high income. All this led to a process of mergers and acquisitions among savings and loan associations, as a result of which their number today is about half of what it was thirty years ago. The total assets of the associations increased over the same period by more than five times.

In addition, under the new conditions, associations are forced to resort to a new market strategy, trying to get closer to commercial banks in terms of one * - walkie-talkies, i.e. they became:

practice the issuance of commercial and consumer loans;

formalize your debts with securities and spend them on the secondary market;

convert savings accounts into time deposits.