Washington People: One Suggestion for Meeting the Fico Tab: Tap Federal

The Federal Reserve, not banks, is the key to capitalizing the Savings Association Insurance Fund - at least that's the thinking of Alexandria, Va.-based banking consultant Bert Ely.

Last week Mr. Ely sent letters to lawmakers urging them to tap the Fed's $4 billion surplus to pay the yearly tab for Finance Corp. bonds, which would end the banking industry's opposition to the thrift fund fix.

Mr. Ely said interest earned on the Fed's existing surplus, plus money put into the fund annually, would cover 80% of the $793 million due each year on the Fico bonds. Lawmakers could then decide whether thrifts would remain responsible for the rest of the tab or if banks should be forced to contribute.

Current plans for the thrift fund fix call for banks to assume most of the Fico interest payment - a move they are lobbying furiously to kill.

"Of course banks would still oppose any Fico payments, but this makes it easier to do a deal," he said.

Mr. Ely pointed out that his plan offers another political benefit: The Fed's surplus is not included in the federal budget and tapping it would not add to the deficit.

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John M. Abbott is the Office of the Comptroller of the Currency's new deputy for international banking and finance.

Prior to his appointment, Mr. Abbott was an adviser to the U.S. executive director of the International Monetary Fund.

Mr. Abbott will oversee multinational financial organizations, and will keep close contact with foreign bank supervisors. He reports to Susan Krause, senior deputy comptroller for bank supervision policy.

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Jerry Baugh has joined the Consumer Bankers Association as director of membership and marketing. He had been senior executive vice president and chief operating officer of CFS Financial, Fairfax, Va.

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The Conference of State Bank Supervisors last week tapped James O. Leese as a special consultant. Mr. Leese retired in February from his post as regional director of the Federal Deposit Insurance Corp.'s Kansas City office.

Mr. Leese will help the group coordinate supervision of multistate banks between state and federal banking regulators.

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