The Nation : Fund That Insures S&Ls; Is Deteriorating

A federal audit is expected to show that the fund that insures deposits at savings and loan associations deteriorated dramatically last year in spite of the government’s efforts to stabilize the beleaguered S&L; industry. The Federal Savings & Loan Insurance Corp., which insures deposits up to $100,000 and manages failed S&Ls;, faced liabilities that exceeded its assets by as much as $13 billion at the end of 1987, government sources said. That was more than double the deficit of $6.3 billion the insurance fund had at the end of 1986. The fund’s growing deficit reflects the deepening problems of the S&L; industry, where hundreds of institutions are insolvent but are kept open because the government cannot afford to close them and pay off depositors.