Brady and Seidman Wrangle Over Who Will Pick RTC Chief
The thrift bailout needs a well-established, successful chief executive. Treasury Secretary Nicholas Brady and Resolution Trust Corp. Chairman L. William Seidman agree.
But questions of who will appoint the new CEO, and whenm have created a logjam over how best to restructure the agency.
Also still being debate is where responsibility for the RTC's performance will lie: with the RTC Oversight Board, as Mr. Seidman would like, or with the RTC board, as Mr. Brady prefers.
Law Established Two Boards
The 1989 thrift bailout law created both the Oversight Board, which sets the RTC's policies and reviews its progress, and the RTC boards, to actually shut down thrifts and sell off assets.
Right now, the board of the Federal Deposit Insurance Corp., which Mr. Seidman also heads, and the RTC board are one and the same. With so many bank problems looming, Mr. Seidman wants to cut the FDIC off from the RTC. He wants the new chief executive to report directly to Mr. Brady, who serves as chairman of the RTC Oversight Board.
Mr. Brady does not want to mix operating responsibility with oversight. "A body charged with oversight cannot impartially perform that duty if it is also charged with operations," he told the Senate Banking Committee last Wednesday.
Mr. Seidman wants the chief executive to be a presidential appointee, while Mr. Brady wants Mr. Seidman to select the new chief.
Mr. Seidman wants the CEO to be hired only after the RTC is stripped from the FDIC. Mr. Brady wants a new chief put in place before any structural changes are made.