LIBRARY
MAR 81989
FED ER AI DEPOSIT INSURANCE CORPORATION
TESTIMONY OF
L. WILLIAM^SEIDMAN
CHAIRMAN
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
\
THE ADMINISTRATION'S PROPOSED "FINANCIAL INSTITUTIONS REFORM,
RECOVERY AND ENFORCEMENT ACT OF 1989“
BEFORE THE
Œ) SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION,
' „ REGULATION AND INSURANCE
0 COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
UNITED STATES HOUSE OF REPRESENTATIVES
10:00 a.m.
March 8, 1989.
, Rayburn House Office BuildingRoom 2128
MAR 81989
FED ER AI DEPOSIT INSURANCE CORPORATION
TESTIMONY OF
L. WILLIAM^SEIDMAN
CHAIRMAN
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C.
\
THE ADMINISTRATION'S PROPOSED "FINANCIAL INSTITUTIONS REFORM,
RECOVERY AND ENFORCEMENT ACT OF 1989“
BEFORE THE
Œ) SUBCOMMITTEE ON FINANCIAL INSTITUTIONS SUPERVISION,
' „ REGULATION AND INSURANCE
0 COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS
UNITED STATES HOUSE OF REPRESENTATIVES
10:00 a.m.
March 8, 1989.
, Rayburn House Office BuildingRoom 2128
Good morning, Mr. Chairman and members of the Subcommittee. I am pleased to
testify today on President Bush's proposed "Financial Institutions Reform,
Recovery and Enforcement Act of 1989" ("President's Proposal").
FDIC SUPPORTS PRESIDENT'S PROPOSAL
The Federal Deposit Insurance Corporation ("FDIC") supports the President's
proposed legislation for the savings and loan ("S&L") industry and the Federal
Savings and Loan Insurance Corporation ("FSLIC"). We believe it is a sound,
constructive and farsighted proposal that should be enacted. The President's
Proposal provides for prompt action to resolve the S&L situation and proposes
structural and regulatory reforms designed to make the federal deposit
insurance system cost-effective. Also, Mr. Chairman, your "Alternative Thrift
Recovery Proposal" ("Annunzio Alternative Proposal") is an important
contribution to the process.
Our only reservations about the President's Proposal concern a few provisions
relating to the independence of the deposit insurer. As pointed out below,
these proposals would hamper the FDIC's ability to perform, at the very time
it is being asked to undertake major new responsibilities.
Before commenting specifically on the proposed legislation, we first would
like to describe the FDIC's recommendations for structural and regulatory
reforms to the deposit insurance system. In addition, we will address the
size of the problem, the President's financing proposal and the ongoing
testify today on President Bush's proposed "Financial Institutions Reform,
Recovery and Enforcement Act of 1989" ("President's Proposal").
FDIC SUPPORTS PRESIDENT'S PROPOSAL
The Federal Deposit Insurance Corporation ("FDIC") supports the President's
proposed legislation for the savings and loan ("S&L") industry and the Federal
Savings and Loan Insurance Corporation ("FSLIC"). We believe it is a sound,
constructive and farsighted proposal that should be enacted. The President's
Proposal provides for prompt action to resolve the S&L situation and proposes
structural and regulatory reforms designed to make the federal deposit
insurance system cost-effective. Also, Mr. Chairman, your "Alternative Thrift
Recovery Proposal" ("Annunzio Alternative Proposal") is an important
contribution to the process.
Our only reservations about the President's Proposal concern a few provisions
relating to the independence of the deposit insurer. As pointed out below,
these proposals would hamper the FDIC's ability to perform, at the very time
it is being asked to undertake major new responsibilities.
Before commenting specifically on the proposed legislation, we first would
like to describe the FDIC's recommendations for structural and regulatory
reforms to the deposit insurance system. In addition, we will address the
size of the problem, the President's financing proposal and the ongoing