14
Tuesday, January 29, 1991 / University Daily Kansan
Forecast warns FDIC will run out of money
The Associated Press
WASHINGTON — The Bush administration is projecting that the government fund ensuring bank deposits will run out of money next year unless banks shore it up with billions of dollars.
The forecast, to be included in the administration's budget due out Feb. 4, is the first official acknowledgment of a possibility that private economists have warned of for months.
By Sept. 30, 1992, according to the forecast, there will be a $4 billion deficit in the Federal Deposit Insurance Corp.'s bank fund, which stands behind $2.2 trillion in deposits. By the end of 1995, the Office of Management and Budget believes the deficit will be $22.5 billion.
Those losses likely will occur even if the FDIC increases the insurance premium paid by banks to 23 cents per $100 of deposits, OMB projects. That's an 18-percent increase over the current 19.5-cent premium and nearly double last year's 12-cent premium.
The forecast was presented last week to banking industry representatives who were struggling to agree on a mechanism for rebuilding the fund, according to industry sources, who spoke on condition of anonymity.
The Congressional Budget Office is expected to present similar, or even more pessimistic, findings to the Senate Banking Committee today.
President Bush likely will mention efforts to strengthen the fund in his speech, but it is not clear.
will be part of the administration's larger proposal for the biggest overhaul of the financial system since the bank will probably be released next week.
Meanwhile, a source familiar with the administration's thinking, who also spoke on condition of anonymity, said Treasury Secretary Nicholas F Brady will almost certainly recommend that commercial giants such as Ford Motor Co. and Sears, Roebuck &
Co. be permitted to own banks
Laws aimed at preventing the concentration of financial power have long restricted such combinations, but the Treasury Department believes broadening the ownership of banks will bring much-needed capital into the business.
Separately, administration officials are re-thinking their desire to consolidate banking regulation into one agency within the Treasury Department, the source said. They now are looking at a more modest increase in the Federal Reserve oversees holding companies but leave intact the current system that splits bank regulation among three agencies.
The administration's fear is that Congress would approve a unified regulator but would insist that it be made to the executive branch, the source said.
In his speech, Bush likely will not get into the specifics of his plan or of how the FDIC fund will be recapitalized. He has said that they will not have to pay for
bank failures as they have for the collapse of the S&L industry.
The Treasury Department has posed — but not decided — that banks provide an extra $5 billion a year for five years, roughly an extra 20 cents per every $100 in deposits, according to an industry source.
The money would go into a special trust fund within the FDIC and be spent in an "early intervention" program to strengthen weak banks before they fail. Bankers would serve as trustees of the special fund, giving them some say over how the money is spent, the source said.
Staff members of bank trade groups, who are evaluating the proposal at the request of the Treasury should be shoved up by their industry
rather than by taxpayers. But they remain deeply divided over how to do it and how much and when the money should be provided.
FDIC Chairperson L. William Seidman acknowledged differences among bankers but said he remained confident that the information out in additional meetings this week.
"I think they (bankers) are working toward some common principles which they can all accept," he said. "They all realize we need to do something. They all realize we need to act earlier to prevent bank failures."
The largest bank holding companies are advancing a plan similar to Treasury's that would provide money to weak banks before they fail
--for coupons every other Tuesday!
Save
$$$$$$$$$
CMICORR
FREE CONTACTS*
One pair of disposable contacts to present
With coupons from the Kansan!
FREE SOLUTION*
B & L Renu
CLASSES
Free U.I. & Jor Suntint coating on old prescription glasses (with exam & coupon)
* WITH COUPONS
- GAMES * COMICS
* MINIATURES* OPEN GAMING
15% discount to KUGAR members!
10% OFF
Dr. Charles Pohl
841-2866 EXPIRES 5/31/91 Dr. Kent Dobbins
843-5665
Any Purchase
1000 Mass St. Suite B Open Sundays,& weekdays until 7:00
841-4294
820-822 Mass.
For Our Cassette Customers ..
15% off Kief's everyday sale prices!
(choose from thousands of titles)
*with coupon only* **Jan 29**
841-0100
- with coupon only • Jan. 29 thru Jan. 31
Buy one sandwich and get a second of equal value for 1/2 price
Fantastic Sam's
the Original Family Haircutters
Open Mon Thurs 11:00am 10:00pm
Fri & Sat 11:00am 2-00am
Closed Sunday
733 NEW HAMPSHIRE
Expires 2/4/91
$6.95
BUY ONE GET ONE FREE
Precision Hair Cut
By a professionally trained stylist
Reg. $9.00 (styling extra)
SUPER TACO SALAD
"You don't have to pay
a lot to look good!"
**expires** 2-25-91 **749-1976**
Coupon expires
Not valid with other offers 2/12/91
99¢
Try our veggie chili
burrito for only 99¢ with
any drink purchase
Reg. $2.55
not valid weather offers
*expire2/12/91
CAFE AND ESPRESSO SHOP
12th & Ind. 841-2310
Above Yellow Sub
This coupon entitles the bearer to one 50c game during open bowling. Limit two coupons per person per visit. The Kansas Union Iawbowl
9th & Iowa 749-3507
Level One 864-3545 Expires 2/12/91
- 3 video tapes
- 2 days
2 Video Tapes and VCR One Night Rental $5.99 EXP.20
Expires 2/12/91
3 MONTHS
$59.00
AEROBIC STUDIO (The Malls Shopping Center)
erobics
Only $3.99!
842-1983
• Tanning Bed Available!
25th & Iowa • Holiday Plaza • 841-6232
MEDIUM LARGE
$6.95 $8.95
(Single Topping)
FREE DELIVERY
SECOND PIZZA ONLY $4
$1.00 VALUE
$1.00 off Evening Buffet (7 days a week)
50¢ off Luncheon Buffet (7 days a week)
544 W. 23RD
749-4244
FREE DELIVERY
PIZZA LASAGNA SALADS
SPAGHETTI MANICOTTI
PIZZA SHOPPE
842-0600
1/4lb. Cheeseburger & Fries
Try our other Specialty Sandwiches:
Tenderloin, Chicken, Fish, Gyro
Expires 2/28/91
Not Good With Other Speclats
LASAGNIA, MANNICOTTI, or 1 LB. SPAGHETTI
+ GARLIC TOAST + 32 OZ. COKE
FREE DELIVERY $4.95
---
PIZZA!
ANY 9" PIZZA &
A MIG OF BEER
BURGER SPECIAL
Tuesday 5pm-Close
1/2 price single hamburgers
PIZZA SHOPPE 842-0600
$2.75
2309 IOWA
THE MEATY ONE
Canadian Bacon, Sausage,
Hamburger, and Pepperoni
1015 E.23rd 842-7000
3201 W.6th St.
749-2466
no place higher like
SONIC
Expires 5/31/91
FREE DELIVERY
MEDIUM LARGE
$7.95 $9.95
2 For 2 For
$12.95 $15.95
MOTO PHOTO 30% OFF FILM DEVELOPING
ONE HOUR
With this coupon, receive 30% OFF the regular price for developing and printing (of C-41 Processing only) at One Hour Moto-Photo. Not valid with any other promotion. One roll per coupon.
2340 IOWA
EXPIRES 2/29/91
Personalized lettering with purchase (limit 6 letters per garment) on the following:
* Hanes Beefy Tees (long & short sleeve)
* Lee Crossgrain 11oz.
* Jerseys by Russell
Numbers & Greek letters available
Custom screen printing with no art or set-up charges
Huge selection of KU shirts
Desert Storm shirts available. Hurry while they last!
$1.00 off Reg.$5.50
The Bum Steer Buffet
THE BUM BUTTER
All you can eat!
5-7pm every Tuesday & Thursday
12-2pm & 5-7pm on Sundays
2554 Iowa
841-SMOKE