Scoundrel or Scapegoat? A Reassessment of the Office of Thrift Supervision’s Performance Before the 2008 Financial Crisis

Abstract

This research attempts to determine whether Congress was justified in shutting down the Office of Thrift Supervision (OTS) in the wake of the 2008 financial crisis. I do so by comparing its performance with that of the other federal banking regulators: the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve. Results show that the OTS is not consistently the worst performer across a variety of measures. This finding suggests it was unfairly scapegoated and that many of the problems attributed to the OTS still remain at the other agencies, despite financial reforms in 2010.