WASHINGTON - Paul A. Bauer, president of Bauer Financial Reports Inc., has a novel idea for recapitalizing the thrift insurance fund.

There is more than enough money up for grabs in the nation's 1,100 mutual thrifts to recapitalize the Savings Association Insurance Fund, according to the Coral Gables, Fla., publisher.

Mr. Bauer's proposal - like many others designed to fix SAIF - would require congressional action.

Under his plan, SAIF would be declared the owner of all mutual thrifts' net worth. The fund would not be paid any cash until the thrift chose to convert to public ownership but could count the value as reserves. SAIF needs $6.6 billion more to reach the congressionally mandated reserve target of $1.25 for every $100 of insured deposits.

The government could declare: "The equity in every mutual thrift is the property of the SAIF, and when it goes public, the SAIF would have to be paid the net worth of the mutual," Mr. Bauer explained.

In addition to recapitalizing SAIF, Mr. Bauer's proposal would apply to interest payments on Financing Corp. bonds, which were sold in 1987 to begin the industry's cleanup.

"The combined equity in the remaining mutual thrifts is approximately $17.9 billion - enough to recapitalize the SAIF, pay off the Fico bonds and have a few billion left over," Mr. Bauer said.

Federal regulators and Congress are considering a number of proposals to shore up SAIF. They fear thrifts will be put at a competitive disadvantage later this year when bank insurance premiums are slated to drop dramatically.

Though thrifts are desperate to find a way around paying six times more for deposit insurance than banks do, Mr. Bauer's idea prompted indignation from an industry trade group.

"The government can't just come and expropriate private property, which this is," said Robert R. Davis, chief economist of America's Community Bankers. "You are talking about nationalizing hundreds of institutions."

Who owns a mutual thrift is a tricky question. While its depositors are supposed to be its owners, they are not on the hook if the institution gets into trouble. Managers, too, have claimed a stake in mutuals' net worth.

Mutuals gained attention over the past two years as many launched initial public offerings. Their managers pocketed hundreds of millions of dollars in the wave of deals. Regulators, spending much of 1994 rewriting the regulations governing mutual thrift conversions to stock ownership, limited insider profits in the deals.

As the thrifts go public, they typically double their net worth with the proceeds of the stock sales.

"Who should have all this net worth?" asked Mr. Bauer.

"Since the taxpayers have been asked to bail out the ones that went belly up," said Mr. Bauer, "the easiest way for me to see to give it back to the community at large is to give it back to the SAIF. At least it protects depositors on a national basis."

Mr. Bauer has been a banking analyst for 20 years. His firm publishes, among other titles, Jumbo Rate News, a weekly newsletter.

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