BANKING & FINANCE - July 28, 1993

Commission Calls for Scrapping of Thrifts: A blue-ribbon commission urged that thrifts be scrapped and that the government sharply cut the extent it will guarantee savings deposits. The government-appointed panel said it made no economic sense in today’s increasingly integrated financial markets to have a separate thrift industry. It urged that the remaining 1,800 S&Ls; be converted into commercial banks. The group of scholars, businessmen and former government officials also said the insurance system that backs bank and thrift deposits in the case of failure is badly in need of change so future S&L-type; disasters can be avoided. S&Ls; historically have provided mortgage financing. But the panel noted that barriers traditionally separating the mortgage market from other markets have fallen, reducing the need for an industry serving just one segment.