WASHINGTON - Federal Reserve Governor John P. LaWare said the U.S. banking system does not appear threatened by exposure to Olympia & York, the Canadian-owned real estate concern in bankruptcy proceedings.
"Although some U.S. banks - a half dozen or so - also have sizable claims on O&Y, their exposures constitute a relatively small share of O&Y debt and does not appear to be unmanageable," Mr. LaWare said in an appearance before the House Banking Committee.
Mr. LaWare also said problem real estate loans have stabilized, and are getting neither worse nor better.
Acting Comptroller of the Currency Stephen R. Steinbrink told the panel that 35 national banks with assets of $15 billion could be seized Dec. 19, when new rules for "prompt corrective action" take effect. The provisions in last year's banking law would require regulators to close institutions when capital dips below 2% of assets.
On Wednesday, the chairman of the Federal Deposit Insurance Corp., William L. Taylor, said as many as 80 institutions with state and federal charters might have to be closed under the new rules.