Seidman says he battled Sununu zTC Bank regulator says staff chief delayed his exit.

October 16, 1991|By New York Times

WASHINGTON HC NXB — WASHINGTON -- In his last full day as the nation's senior banking regulator, L. William Seidman said he would have left his post sooner had he not been assailed by the White House chief of staff, John H. Sununu.

"Absolutely no question about it," Seidman said as he prepared to relinquish the chairmanship of the Federal Deposit Insurance Corp. and the Resolution Trust Corp. today.

Referring to his visit to the White House in the spring of 1990 and the personality clash with Sununu, who sought very publicly then to push him out the door, Seidman said, "I went over there with the purpose of arranging an amicable, friendly and smooth transition."

In an interview in his bare sixth-floor corner office overlooking the Washington Monument and the Mall, Seidman made these other points:

* None of the nation's largest banks are in danger of failing.

* In the first three months of next year, the FDIC may be forced to consider another increase in the premiums it charges banks to insure deposits.

* The Bush administration's attack on bank examiners and regulators, accusing them of helping cause tighter credit, could lead to dangerously lax supervisory standards.

* As long ago as 1986, senior regulators, including himself, saw many of the warning signs for the crises now afflicting the banking and savings and loan industries but did not move vigorously enough to contain the problems.

* If the economy grows next year at a rate slower than 3.5 percent to 4 percent, as measured by the gross national product, the costs of bailing out banks and savings and loans might be significantly higher than current administration estimates.

Many economists have forecast a growth rate lower than that, but Seidman stood by the administration's estimates yesterday. He did

say, however, that the estimates might be revised based on a new FDIC review that will be sent to the Office of Management and Budget this month.

Seidman leaves office as the bank insurance fund is on the verge of borrowing tens of billions of taxpayer dollars and regulators are seeking another $80 billion for the savings and loan rescue.

In his six years as its outspoken chairman, he has built the FDIC from a backwater agency to one of the most powerful institutions in the nation, doling out billions of dollars in contracts and determining the fate of the country's most important financial institutions.

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