Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Fri, Aug 21 1992 Date: Fri, 21 Aug 92 04:08:23 EDT Message-ID: 08-21 0000 DECISIONLINE: Banking & Economy USA TODAY Update Aug. 21-23, 1992 Source: USA TODAY:Gannett National Information Network FDIC CHAIRMAN DIES: FDIC Chairman William Taylor, 53, died Thursday of a heart attack a week after undergoing colon surgery. His death leaves the top U.S. banking agency without an experienced full-time regulator in charge at a time of great turmoil and uncertainty. With Taylor gone and an election looming, some analysts fear the FDIC won't be able to do its job: seizing sick banks and paying their depositors. (For more, see special FDIC package below). MORTGAGE APPLICATIONS JUMP: Mortgage applications, spurred by falling interest rates, jumped 10% from last week, the Mortgage Bankers Association says. Nearly 56% of the applications were for refinancing mortgages. The volume of applications is 126% higher than a year earlier. Last week, 30-year fixed mortgages averaged 7.96%, the Federal Home Loan Mortgage Corp. says. One-year adjustable rate mortgages averaged 5.30%. M2 RISES SLOWLY: A closely watched measure of the money supply rose $9.1 billion, to $3.47 trillion the week of Aug. 10, the Federal Reserve said Thursday. M2 is cash in deposits in checking and savings accounts and money market mutual funds. Slow growth in the money supply is considered a drag on the economy. So far this year, M2 has grown at a 1.5% annual rate, below the Fed's target range of 2.5% to 6.5%. T-BILL RATES FALL IN AUCTION: Interest rates on one-year Treasury bills fell in Thursday's auction to the lowest level in more than 29 years. The average discount rate was 3.28%, down from 3.37% at the last auction on July 23. It was the lowest since 52-week bills averaged 3.062% on April 10, 1963. ENERGY FUTURES RISE: Energy futures were mostly higher on the New York Mercantile Exchange Thursday. September light sweet crude was 7 cents higher at $21.44 a barrel and September heating oil was .27 cent higher at 58.42 cents a gallon. The price for September unleaded gasoline was .47 cent higher at 61.64 cents a gallon, while September natural gas was 0.7 cent higher at $1.845 per 1,000 cubic feet. GOLD AND SILVER FALL: At the New York Commodity Exchange on Thursday, gold for current delivery fell 50 cents to $337.50. Republic National Bank quoted bullion at $337.50, off 60 cents. Gold fell in London to $337.35, down from $338.45. In Zurich, gold fell to $337 from $338. In Hong Kong, gold fell 91 cents to $337.07. On the Comex, silver for current delivery fell to $3.728 an ounce, off 4.4 cents. JOBLESS CLAIMS INCREASE: The number of Americans filing new claims for jobless benefits took its largest jump in more than 10 years this month as a result of a two-week shutdown of General Motors' operations, the government said Thursday. The Labor Department said the number of new claims surged by 71,000 to 474,000 in the week ended Aug. 8. It was the largest one-week increase since Jan. 23, 1982. BANK OF CANADA REPORTS LOSSES: National Bank of Canada reported a third-quarter loss resulting from $184.4 million in additional loan loss provisions and said it will cut its quarterly dividend, Bloomberg Business News reported Thursday. The bank said the increase in provisions was related to the "real estate crisis" and exposure to Olympia & York Developments Ltd. The loss was equivalent to $1 a share. PIONEER AND MUTUAL TO MERGE: Pioneer Savings Bank and Washington Mutual Savings Bank announced Thursday the signing of a definitive agreement for Washington Mutual to acquire Pioneer Bank. If approved by regulators and three quarters of the shareholders of Pioneer Bank and the majority of the shareholders of Washington Mutual, the transaction is expected to be completed in early 1993. KEATING LOSES ESTATE: Charles Keating, convicted in one of the largest savings and loan frauds, will soon lose his 5.5 acre estate in the Phoenix suburb of Paradise Valley. Security Pacific is foreclosing on a $2.2 million loan on Keating's 4,500-square foot home. A California couple has agreed buy the home for $1.2 million. DOW JONES OPENS SLIGHTLY DOWN: The Dow Jones average of 30 industrials opens Friday at 3304.89 after closing down 2.17 points Thursday. The New York Stock Exchange composite opens at 230.38, down 0.03. The American Stock Exchange market value opens at 385.87, down 0.02. The NASDAQ OTC composite opens at 567.86, down 0.25. DOLLAR OPENS DOWN OVERSEAS: The dollar opens down on Friday. It opens at 0.5160 British pounds, down from 0.5171; 4.9140 French francs, up from 4.9533; 1.4480 German marks, down from 1.4526; and 126.28 Japanese yen, down from 126.30. (As of 3 p.m. Thursday. Source: First American Bank of New York.) SPECIAL PACKAGE ON FDIC: HOVE NAMED INTERIM CHAIRMAN: The death of FDIC Chairman William Taylor Thursday of a heart attack comes at at time of great turmoil for the banking industry. Andrew "Skip" Hove, a longtime Nebraska banker, was named acting chairman of the FDIC, where he had been vice chairman since 1990. A permanent replacement likely won't be named until Taylor's term expires in February. Hove has been given high marks by observers. COST OF FAILURES COULD RISE: If the change at the top slows the FDIC, the cost of bank failures could rise as losses pile up at troubled banks. That could deplete the FDIC fund that pays depositors at failed banks. Taxpayers have guaranteed the FDIC a line of credit up to $30 billion. Banks might have to pay much higher premiums for deposit insurance, the cost of which is passed on to customers. CRUCIAL ISSUES UNRESOLVED: Taylor's death leaves some tough issues unresolved. The FDIC board may be deadlocked 2-2 over whether to raise the annual premiums banks pay for deposit insurance to from 23 cents to 28 cents for every $100 in deposits. In a vote earlier this year, the board OK'd the increase 3-2. Taylor joined the majority despite fierce opposition from bankers. A final vote is scheduled for next month. (End of package.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Martin Baucom. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM