BANK BOARD CHAIRMAN SAYS MORE FSLIC FUNDS NEEDED
Federal Home Loan Bank Board
chairman Edwin Gray said pending bills do not provide enough
money for the Federal Savings and Loan Insurance Corp to deal
with insolvent thrift associations.
    The Senate has passed a bill to provide 7.5 billion dlrs in
FSLIC recapitalization, while the House Banking Committee has
approved five billion dlrs in new funds.
    "We are operating right now on net operating losses of four
billion dlrs a year. That's double last year. We think it's
going to increase," Gray told a Senate Appropriations
subcommittee hearing.
    "The FSLIC is insolvent under generally accepted accounting
procedures and it lacks the financial resources to
cost-effectively resolve its caseload of insolvent
institutions," Gray said.
    Gray said FSLIC now had 191 cases and the number was
expected to increase.
    He said the gap between the 80 pct of healthy savings
associations and the other 20 pct of thrifts grew in 1986.
    Banking committee chairman William Proxmire, D-Wis, told
Gray he supported more recapitalization, but other members did
not want to impose a greater burden on healthy thrifts.
 Reuter
