Word: thrifts
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Dates: during 1980-1989
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...primary objective of such a sweeping rescue was to restore the confidence of thrift depositors, some of whom have withdrawn their savings in fear of the system's insolvency. In fact, the Administration secretly feared a long-shot possibility that the drama of its bailout might spark a run on S & L deposits. To prepare for that dire prospect, senior White House officials and Federal Reserve Board Chairman Alan Greenspan met in the Roosevelt Room of the White House the night before Bush's plan was made public. Greenspan agreed that the Fed would stand ready to pump billions...
...healthy portion of the thrift industry will pay its share through an increase in its insurance premiums. The rate would rise from the current $2.08 per $1,000 of deposits to $2.30 from 1991 until 1994, after which it would decline to $1.80. The rate for banks would increase too, from 83 cents per $1,000 to $1.20 in 1990 and $1.50 thereafter. Even though both industries' insurance funds would be administered by the FDIC, their proceeds will be kept separate...
...reason for raising the banking industry's fees as part of the rescue package is to ensure that they do not obtain too much of a competitive advantage over thrifts in terms of their costs of doing business. Another reason is simply to bolster the banking industry's reserve fund so that it does not run into the same problems encountered by the FSLIC. In the end, at least some of the increased costs will probably be passed along to consumers, since thrift profits are already squeezed. Said Texas Democrat Henry Gonzalez, chairman of the House Banking Committee: "The little...
...thrift industry seemed to meet the proposal with grudging acceptance but a fair amount of grumbling. Healthy S & Ls object philosophically to paying excessive cleanup costs for their fraudulent and incompetent brethren. Says Adam Jahns, chairman of Chicago's Craigin Federal Savings & Loan: "I don't think we should have to pay for serious crimes committed by others." Another complaint by S & Ls is that by combining thrift and banking supervision, the Bush plan may blur the distinction between the two and eventually remove any competitive advantage the thrifts still have, principally the ability to borrow long-term funds from...
Bankers were miffed too about being tied up with the S & Ls. The symbolic point of contention was the trusted FDIC decal that banks display prominently on their premises and in their advertising. The Administration at first told thrift owners that they would be able to display the symbol under the new plan. To many depositors, the seal represents greater safety and security than the thrift industry's own logo. Bankers therefore vociferously oppose sharing the FDIC seal, maintaining that it would be effectively tarnished if given to the thrifts and would lead to the complete merging...