The Federal Savings and Loan Insurance Corp., the federal insurer of savings and loans, is not the only federal deposit insurance system Congress will be examining in month-long hearings that begin today.
Falling oil prices, problem farm loans and Third World debt threaten to strain the Federal Deposit Insurance Corp., which provides federal deposit insurance at banks.
Although generally considered by financial and government officials to be in better shape than FSLIC, the FDIC faces increasing pressure from member banks who are victims of market pressures in the energy, agricultural and foreign loan arenas.
When banks fail, the FDIC must pay depositors from its reserves. As a way to ward off potential demand on FDIC, some bankers suggest that troubled banks be allowed to use the special accounting techniques now used by troubled S&Ls.
One proposal, supported by the American Bankers Association and the Independent Bankers Association of America, seeks a "capital stabilization" plan similar to the controversial one allowed savings and loans. The plan would let FDIC boost bank assets with so-called capital certificates. Banks would get the note in exchange for a written promise to repay the loan from future earnings.
The bank and the FDIC could count both notes as assets, just as S&Ls and FSLIC do. Critics of the FSLIC system, however, say the technique is nothing more than an accounting gimmick that masks the severity of the thrift industry's problems.