Fed Chief Backs Broader Powers for Thrifts
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WASHINGTON — Federal Reserve Board Chairman Alan Greenspan voiced support Wednesday for giving the nation’s savings and loan banks broader powers, saying they should not be required to specialize in home mortgages.
Greenspan, testifying before a House Banking subcommittee, is one of five top banking regulators discussing remedies for the thrift industry’s depleted deposit insurance fund.
The Savings Assn. Insurance Fund’s problems have mounted in recent years because of a dwindling number of S&Ls; and leftover debt from the thrift failures of the 1980s.
The fund, which insures S&L; depositors for up to $100,000 if their bank goes out of business, is now in danger of being wiped out in a major S&L; failure.
Last week, regulators and the Clinton Administration proposed merging the deposit insurance funds for commercial banks and thrifts. Regulators also indicated that they would propose that S&Ls; convert into commercial banks.
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