WASHINGTON - Federal regulators' power to seize troubled banks and thrifts is not sufficient to prevent an episode of failures and deposit insurance fund losses rivaling those of the late 1980s, Office of Thrift Supervision Director Ellen Seidman said Wednesday.So-called "prompt corrective action" often comes too late, she said, especially when a bank holds a high concentration of residual securitized loans, engages in off-balance-sheet activities and capital arbitrage, outsources vital bank functions, or actively interferes with the regulatory process.

"With prompt corrective action, our ability to control risk has been strengthened considerably - or has it," Ms. Seidman said at a speech sponsored by the Exchequer Club. "In some ways, that's the $64,000 - or is it the $64 billion - question."

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