Charles Keating (1923–2014)
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Who They Were
Charles Keating (1923-2014) was an American businessman who became one of the most notorious figures of the savings and loan crisis of the 1980s. He was the head of Lincoln Savings and Loan, a California thrift whose collapse became emblematic of the wider wave of savings and loan failures that cost American taxpayers enormous sums. Keating's institution failed in 1989, and he was later convicted of fraud in connection with its operations, though aspects of his legal saga continued for years afterward. His name became permanently attached to the Keating Five - a group of five U.S. senators investigated for allegedly intervening improperly with federal regulators on his behalf. The episode made Keating a symbol of the reckless lending, lax oversight, and political entanglement that characterized the crisis, and it drew lasting attention to the relationships between regulators, lawmakers, and the industries they oversee.
Key Contributions
Keating's significance is as a cautionary case rather than a contributor of ideas. The failure of Lincoln Savings and Loan was one of the most expensive single thrift collapses of the crisis, costing taxpayers billions of dollars, and it came to illustrate how deregulation combined with weak supervision could allow risky and fraudulent conduct to flourish. The Keating Five investigation by the Senate Ethics Committee examined whether five senators had improperly pressured regulators to ease scrutiny of Lincoln; one of them was formally reprimanded for his conduct. The scandal fed public debate over the ethics of relationships between money, lawmakers, and regulators. For students of financial history, Keating's downfall remains a standard example of the moral-hazard and oversight failures that made the savings and loan crisis so costly to the public.
On EconRecall
Head of Lincoln Savings and Loan, whose 1989 failure and fraud conviction made him the face of the savings and loan crisis and the 'Keating Five' scandal. Play the games that feature Charles Keating: