BANKING & FINANCE - Aug. 23, 1993
From Times Staff and Wire Reports
New S&L; Capital Requirements to be Set: The federal Office of Thrift Supervision today will announce new rules requiring adequate capital to cushion losses brought by changes in interest rates. Designed to avoid future S&L; bailouts, the rules were mandated by a 1991 banking law. Rates paid on savings accounts can swing much more quickly than rates earned on long-term fixed-rate mortgages, so an S&L; could suddenly find itself paying out much more than it earns. The OTS said 22% of the nation’s S&Ls;, or 411 institutions, faced “above-normal” levels of interest-rate risk at the end of 1992.
