|FOR IMMEDIATE RELEASE:||CONTACT: CHRISTI HARLAN|
|Monday, May 24, 1999||202-224-0894|
Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, is examining efforts by the Financial Accounting Standards Board and the Securities and Exchange Commission that may result in banks decreasing their loan loss reserves.
The suggested decrease would be "extremely unfortunate," according to top regulators at the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the Office of the Comptroller of the Currency. The regulators shared their concerns in letters sent May 21 to Gramm and Sen. Rod Grams, chairman of the Subcommittee on Securities.
Gramm issued the following statement:
"Any one who recalls the savings-and-loan crisis of the 1980s and what it cost taxpayers will appreciate the need to ensure that financial institutions have adequate reserves to cover losses on loans.
"I share in the concerns of banking regulators who tell me that any governmental effort to scale back loan loss reserves, no matter how well-intentioned, may set us on a course toward repeating the S&L disaster.
"I join the regulators in asking the FASB and the SEC to seek consensus as they set policy on reserves."