
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, July 20, 1990                   TAG: 9007200582
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/4   EDITION: EVENING 
SOURCE: The Washington Post
DATELINE:                                 LENGTH: Medium

S&L BAILOUT MAY BE OUT OF FUNDS BY FALL

The government program to clean up the hundreds of failed thrift institutions around the country will run out of money sometime in the fall unless Congress acts to provide more funds, officials of the Resolution Trust Corp. said Thursday.

Although the ultimate dimensions of the cleanup are not yet clear, the announcement makes plain that the cash on hand will be exhausted before the government is able to "resolve," or dispose of, only about one-third of the dead or dying institutions.

The RTC announced Thursday that it will dispose of 77 more failed savings-and-loan institutions between now and the end of the government's fiscal year on Sept. 30 at an estimated loss of $11.6 billion.

Also Thursday, the RTC released a list of the $3.7 billion in junk bonds that it has acquired as a result of taking over thrifts that had invested in the high-risk, high-yield securities.

The government's junk bond holdings are of widely varying worth, with some of hardly any value at all. Others, however, still could bring substantial amounts of money back into the RTC's coffers, reducing the eventual cost of the savings and loan cleanup.

The announcements came as the Treasury Department reported that it has doubled its borrowing estimates for the current quarter, in part to provide funds for the savings-and-loan cleanup. The Treasury, which initially estimated that it would have to borrow $30 billion to $35 billion during the summer, now expects to borrow between $62 billion and $66 billion.

The replenishment of funds for the savings-and-loan cleanup also complicates the task facing negotiators from Congress and the Bush administration, which are struggling to deal with a budget deficit that has skyrocketed.

House Banking Committeee Chairman Henry Gonzalez, D-Texas, has scheduled a hearing on July 30, and Wednesday wrote RTC head L. William Seidman and Treasury Secretary Nicholas Brady asking them to come "prepared to discuss the RTC's funding needs."

by CNB