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. Thats double last year. We think its 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.
BANK BOARD CHAIRMAN SAYS MORE FSLIC FUNDS NEEDED