Sinking in a Sea of Bad Loans

As thrift institutions fail, their insurance fund is running low

The Federal Savings and Loan Insurance Corporation is supposed to be the lifeboat of the thrift industry, but these days the agency itself is in dire need of rescue. Playing its role as the insurer of deposits in savings institutions, the FSLIC has been nearly swamped by adversity. Beset by severe loan losses, 50 of the 3,200 federally insured savings and loan associations and savings banks have either been reorganized or forced by the FSLIC to merge with other institutions this year. As the agency reimburses depositors at collapsed savings and loans and pays out large sums to healthy institutions that...

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