History of and Rationales for the Reconstruction Finance Corporation

The creation of the Resolution Trust Corporation (RTC) in 1989, the evolution of a too-big-to-fail doctrine within the bank regulatory community in the 1980s, and more recent recommendations that means of regular government intervention be created to support some financial institutions all recall the history of the Reconstruction Finance Corporation (RFC) during the Great Depression. This paper explores the lessons learned from our nation's previous largescale effort to rescue financial institutions and discusses their current relevance.