European Stars And Stripes (Newspaper) - June 25, 1985, Darmstadt, Hesse                                Page 16 the stars and stripes june 1985 daily Magazine Luck of the draw at thrifts by Nathaniel Nash new York times the number of savings and loan associations that Are effectively bankrupt but still open has increased fivefold since to More than and Industry leaders and government regulators expect most will be forced to close or another 400 Thrift units whose assets barely exceed their liabilities will also have a hard time survive in perhaps a third of the federally insured savings and loan associations now open Are Likely to disappear by the end of the some experts Esti depositors should not be because the United states government stands behind the Federal savings and loan insurance the Agency that insures the deposits up to the effect of the casualties will be most acutely Felt by the whose Pool of billion in usable assets could easily be exhausted if a Large Thrift unit were regulators the drying up of the folic Pool would be a major embarrassment to Federal and very inconvenient to a Congress now trying to Cut budget and could possibly destroy much of the Public Confidence in the Thrift the Thrift units that Are effectively but still doing have been allowed to stay open by Federal authorities to Avert an abrupt shakeout that could deplete the insurance fund and might by disrupting Public trigger runs on smaller this has been the policy of the regulatory Federal Home loan Bank Board since the Early when soaring interest rates put Many Thrift units in a Over the past five about 800 Thrift units have been merged or shut Down by the Bank Accord ing to Eric its director of policy and economic and Many of them had net Worth near or below Zero at the time of their in most when a Thrift unit reached Zero net Worth it was merged or shut losses at these thrifts since 1981 have so eroded their assets that a third of the Industry will just not said Richard chairman of Merrill Lynch mortgage capital and head of the Bank Board from he added that the survival of another third of the institutions was dependent on the Luck of the draw on interest while the remaining had very Good the net Worth of a Thrift institution typically erodes when the interest rate it pays on deposits exceeds the rate it gets on such As creating substantial this was the Case in the Early when rates soared to almost 20 percent and Thrift units were carrying 30year mortgages on their books that paid far less than 10 but interest rates have not been the Only in recent Thrift units have been Given More Freedom to invest in areas outside their traditional some of them have plunged into ill advised real estate devel construction Loans and other High risk Many have gone Many have Large portfolios of non earning for the Beverly Hills savings and loan association in California had a positive net Worth until its auditor came in earlier this year and discovered vast real estate development Loans that were Essen daily As a the institution was forced to take a million which immediately wrecked its net it was quickly taken Over by the Bank the one Ray of Hope in recent weeks has been the big drop in interest some experts Are predicting that 1985 will be the Thrift Industry most profitable with possibly 90 percent of the nations Thrift units earning but Many experts note that it will take at least two years of stable rates to help marginal Thrift units sur Vive and Prosper and the ones that make it Are Likely to be those that stick to traditional Home loan mortgage any with a negative net Worth that is losing Money today will probably not said a West coast analyst who asked not to be the lower rates weve seen recently will help some of but Many Are just too far according to a recent report by the Federal Home loan Bank boards top 438 federally insured Thrift with total assets of had negative net Worth liabilities exceeding assets at the end of last in Only 65 with billion in had negative net such a level was simply unheard of before Hemel would not say whether the number of institutions near failure was actually larger than at the end of but other Industry analysts said that an accurate accounting of Thrift unit net Worth would show Many More in the negative and marginally positive Hemel pointed that the recent decline in interest rates has made Many Thrift units profitable this year and that the number with negative net Worth has declined in recent Rafiek the a Mittar us aha vex uhf today crossword by Eugene Sheffer across 1 manner 5 retiring 8 tailors concern 12 concept 13 Meadow 14 King of Israel 15 Blarney 17 deed 18 Endeavor 19 food fish 20 dare devils display 21 weaken 22 craze 23 Buffalo 26 change the subject 30 arabic letter 31 electronic listener 32 Arrow Poison 33 pied 35 entrap 36 buddy 37 Wapiti 38 Tendon 41 neighbor 42 Caesars 551 45 Barren 46 simple ton 48 Spanish room 49 cuckoo 60 hebrew month 51 cad 52 cozy room 53 Brood of 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