Continued high interest rates and the cumulative effects of government regulation will cause more than 1,000 savings institutions to merge or fail by the end of 1983, according to a Brookings Institution study to be made public today.

Separately, a key congressional leader on financial institution problems--House Banking Committee Chairman Fernand St Germain (D-R.I.)--proposed yesterday a $7.5 billion emergency fund to help bail out troubled savings and loan associations, banks and credit unions. He said it is "imperative" that Congress act quickly on the measure.

Government assistance to troubled or failing savings and loan associations or mutual savings banks hit record levels last year, but that was just the first installment of a savings industry merger wave that could cost federal agencies more than $8 billion, the Brookings study concludes.

Although deposits will continue to be protected and customers will receive normal financial services during painful transition periods at various institutions, regulatory agencies face a large administrative and financial burden, warns Brookings research associate Andrew S. Carron in a report on his year-long study.

Because of losses caused by the wide gap between return on mortgage loans outstanding and the interest that must be paid to attract deposits, overall industry losses will exceed $9 billion in the 1981-1983 period, reducing the value of the industry by half, he says.

Meanwhile, St Germain said he will introduce a bill to provide $7.5 billion in assistance to the industry. In a statement, he said the proposed "Home Mortgage Capital Stability Fund" is needed because the Reagan administration has allowed housing construction to slip to "historic lows."

St Germain said he will introduce his bill Tuesday and plans to open hearings on it next month. The proposal would let federal regulatory agencies deposit Treasury funds in financially strapped institutions.

In another development, the U.S. League of Savings Associations, an industry trade group, has mailed a letter to its more than 4,000 members, outlining a proposed new federal agency that could invest in ailing S&Ls with Treasury subsidies estimated at $10 billion in one year. The proposed Community Depository Conservation Corps. would issue promissory notes to savings and loans to improve their net worth.

The trade group also endorsed a plan designed ostensibly to resuscitate the sick housing industry. It would permit lenders to receive an allowance from the Treasury, offsetting part of the difference between prevailing rates and the return on low-rate mortgage loans in their portfolios. Under a third proposal, Treasury and lending institution money would be used to subsidize new mortgages.

A Senate bill to facilitate a restructuring of the industry, introduced last fall by Banking Committee Chairman Jake Garn (R-Utah), has been stalled in committee. The delay is largely the result of determined efforts by competing interests in the financial industry to gain--or not lose--any advantages.

Garn's bill was sharply criticized over the weekend by a coalition of consumer and public interest groups which called for its defeat. Describing the bill as "unsound, anti-housing and anti-consumer legislation," the coalition, led by Ralph Nader's Public Interest Research Group, contends it would void key consumer protection laws, particularly state usury limits.

Thrift institutions--S&Ls in particular--are experiencing their worst earnings crisis since World War II. Net worth declined 15 percent last year as S&Ls suffered losses totaling $5 billion.

Despite a wave of voluntary mergers, federal regulators were forced to arrange nearly two dozen government-assisted mergers of failing S&Ls into stronger institutions last year. And voluntary and supervisory mergers continue to be the order of the day. Indeed, four Chicago associations were merged over the weekend to form the nation's seventh-largest S&L (Story in Washington Business, Page 9).