WASHINGTON -- The Federal Deposit Insurance Corp. said Wednesday that it learned some lessons from the Nov. 19 failure of Pacific Thrift and Loan Co., the $118 million-asset Woodland Hills., Calif., industrial loan company that is expected to cost the insurance fund at least $52 million.

In a report analyzing what went wrong at Pacific Thrift, David H. Loewenstein, the FDIC's assistant inspector general, recommended that the agency make plans to bar the residual assets of subprime securitizations from being counted toward Tier 1 capital.

In his response to the report, Supervision Director James L. Sexton said the FDIC is working with other banking agencies to "limit and/or eliminate" these assets from capital calculations by yearend.

Mr. Sexton added that his department supports imposing a dollar-for-dollar capital charge against the value of all "interest-only residual receivables," which are a byproduct of securitizing subprime loans.

Securitizing subprime loans was Pacific Thrift's main business, but it retained an interest in the assets it sold. The FDIC thought the institution was exaggerating the value of these retained interests, or residuals, and ordered an objective, third-party evaluation. Pacific Thrift hired Ernst & Young to do this.

However, the accounting firm resisted FDIC examiners who wanted to see how it had reached its conclusions, prompting the Inspector General's office to recommend new rules governing troubled institutions' use of advisers.

By yearend, Mr. Sexton said, the FDIC will "draft procedures governing work contracted by a financial institution with third parties to ensure that the parameters of the work to be performed are responsive to the requirements established by the FDIC and that … the FDIC has access to all pertinent work papers."

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