Magazine article American Banker

Seidman to Suggest Limiting FDIC's Role in S&L Bailout; Changes Would Start with New Chairman

Magazine article American Banker

Seidman to Suggest Limiting FDIC's Role in S&L Bailout; Changes Would Start with New Chairman

Article excerpt

Seidman to Suggest Limiting FDIC's Role in S&L Bailout

Changes Would Start with New Chairman

WASHINGTON -- L. William Seidman, chairman of the Federal Deposit Insurance Corp., will suggest Friday that Congress limit his agency's future role in the savings and loan bailout.

The major policy change would kick in after Mr. Seidman's FDIC term expires in October.

This scheduling would allow the agency and its new head to concentrate on major problems in the banking industry.

The FDIC refused to release copies of Mr. Seidman's testimony in advance of his appearance before the Senate Banking Committee. The New York Times reported Wednesday that it had obtained a draft copy spelling out the proposed restructuring.

|Very Rational Strategy'

FDIC spokesman Alan Whitney said the FDIC was not leaping from a sinking ship. Mr. Whitney said the FDIC had accomplished its assigned task of starting the Resolution Trust Corp. and its bailout-management program from scratch.

Mr. Seidman also serves as RTC chairman.

Not everyone agrees that the FDIC is in a position to let the RTC go.

"It sounds like they [the FDIC] are parachuting out and watching the RTC drift out to sea," said Robert Litan, a senior fellow with the Washington-based Brookings Institution. "That is a very rational strategy."

RTC May Need More Money

Congress has been criticizing the RTC for spending more money than ever anticipated to dispose of assets from failed thrifts. …

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