Resolution Trust Corporation

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Resolution Trust Corporation

(RTC), in U.S. history, government-owned company formed in 1989 to liquidate the assets of insolvent savings and loan associationssavings and loan association
(S&L), type of financial institution that was originally created to accept savings from private investors and to provide home mortgage services for the public.

The first U.S. S&L was founded in 1831.
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 (S&Ls). Essentially a huge property-management company operated as an agent of the federal government, the RTC had as its primary mission the disposal (at maximum value) of office buildings, homes, loans, and other assets that were held by bankrupt thrifts in order to reduce taxpayer costs associated with the S&L bailout. Hundreds of S&Ls, which had taken advantage of lax regulations and invested in high-risk real estate and other imprudent assets, failed in the 1980s, and after the Federal Savings and Loan Insurance Corporation itself became insolvent and the Federal Deposit Insurance Corporation assumed its responsibilites, the RTC was created. By the time the RTC was dissolved in 1995, it had closed or reorganized 747 institutions and managed to sell off some $400 billion in assets. The eventual cost to the taxpayers was approximately $130 billion, well below original estimates.
References in periodicals archive ?
For banks, spinning off trust assets into a separate trust corporation is typically beneficial because under this structure, a much smaller AUM level is required to be kept in low-yielding government bonds.
However, it can have a stake in multiple trust corporations.
Espenilla said they are seeing indications that there will be increased number of new applications for trust corporations from banks, insurance companies and asset management firms.
There's plenty of interest to put up a stand alone trust corporations (with existing trust businesses today) and are considering a spin off," he said on the sidelines of The Asset's 10th forum on ASEAN Capital Markets and Investment Summit yesterday, with the Fund Managers Association of the Philippines.
The AUM of the trust corporation will not form part of the parent bank and/or quasi-bank's SBL and DOSRI ceilings while the purchases by the trust corporation in behalf of its clients of securities or instruments issued by its parent bank and/or quasi bank will not form part of the trust corporation's SBL and DOSRI caps.
Northern Trust Corporation is a provider of asset servicing, fund administration, asset management, fiduciary, and banking solutions for corporations, institutions, families, and individuals worldwide.