ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, March 20, 1996 TAG: 9603200050
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Federal Reserve Board Chairman Alan Greenspan expressed frustration Tuesday about Congress' inability to revive the ailing savings and loan deposit insurance fund.
He urged members of the House Banking Committee to push ahead with a compromise that would return full funding to the Savings Association Insurance Fund, whose financial problems are yet another legacy of the 1980s savings and loan disaster.
``It is one of the few things that I think we know of that the Congress can really solve - and you're not solving it,'' Greenspan said. ``And I think that's why you're getting sort of a level of frustration amongst the four of us.''
Greenspan, joined by colleagues from the Treasury Department, Office of Thrift Supervision and Federal Deposit Insurance Corp., urged passage of a bipartisan compromise to bring the Savings Association Insurance Fund to full funding and merge it with the separate and healthy bank insurance fund.
Under the stalled compromise, the nation's 2,000 savings and loans would pay $6 billion to bring the thrift fund to its maximum level, while commercial banks would help S&Ls pay the $780 million annual interest on bonds related to the thrift cleanup. While the S&L industry is strong, the fund is depleted because of the payments for the S&L bonds and a decline in the number of S&Ls as the industry consolidates.
Without such a rescue, regulators say S&Ls would quickly shift their deposits out of the savings association fund and into the bank insurance fund, which charges much lower premiums.
While bankers opposed the bond payments, arguing they had nothing to do with the S&L crisis, the compromise was included in last year's balanced budget package. The deal fell apart when President Clinton vetoed the budget during last fall's showdown with Republican leaders.
LENGTH: Short : 44 linesby CNB