The FDIC’s chief urged a change in Fed loan rules.

William M. Isaac, head of the Federal Deposit Insurance Corp., told the Senate Banking Committee that the Federal Reserve System should relax its rule requiring that all Fed loans to banks be fully supported by collateral. “Consideration should be given to authorizing, even directing, the Federal Reserve to make discount window loans available to solvent institutions on an unsecured basis,” Isaac told the panel. He said the change would allow ailing banks to use collateral--usually government securities--to back loans from non-government borrowers.