A Solution to the S&L Crisis

The Opinion page article "The S&L Crisis Is Far from Over," Oct. 29, predicts further problems in the industry. If the prognostications prove true, it furthers the argument that the Federal Deposit Insurance Corporation (FDIC), the organization responsible for "picking up the tab" on failed S&Ls should have its authority expanded to permit it to issue bonds for the obligations, similar to the types of bonds which are now permitted by FHA, Fanny Mae, and other similar organizations.

Depositors in failed S&Ls with deposits exceeding $10,000 should be paid in bonds, and those deposits less than $10,000 should be paid in cash. Through the insurance of bonds, the taxpayer's liability could be diverted to the public market. The same approach should be applicable to other institutions, such as commercial banks which are members of the FDIC. George C. Scott, Locust, N.J.

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