Thrift Industry:

The Treasury/Federal Home Loan Bank Board Plan for FSLIC Recapitalization

GGD-87-46BR: Published: Mar 3, 1987. Publicly Released: Mar 3, 1987.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO discussed the need for a recapitalization of the Federal Savings and Loan Insurance Corporation (FSLIC) and analyzed a recapitalization plan that the Department of the Treasury and the Federal Home Loan Bank Board (FHLBB) proposed.

GAO found that FSLIC is in dire need of recapitalization because: (1) its primary reserves have fallen below $2 billion; (2) it may have a negative net worth of more than $3 billion; (3) a large number of FSLIC-insured institutions are technically insolvent; and (4) current problems in the thrift industry may cost FSLIC $23.5 billion to resolve. GAO analyzed a recapitalization plan that would provide FSLIC with about $25 billion over 5 years and found that: (1) a financing corporation created by authorizing legislation would borrow $15 billion to finance a portion of the plan; (2) FSLIC would not be able to obtain the additional $10 billion without additional income; (3) the plan would reduce FSLIC flexibility in the years after recapitalization, because it would be paying off the cost of recapitalization; (4) the Treasury/FHLBB recapitalization plan would not allow for sufficient congressional oversight; and (5) FSLIC would have to increase its bank examination activities to prevent fraud or unduly risky industry practices.

Sep 29, 2017

Sep 12, 2017

Sep 7, 2017

Apr 19, 2017

Mar 29, 2017

Feb 24, 2017

Dec 29, 2016

Dec 15, 2016

Nov 15, 2016

Looking for more? Browse all our products here