FED CHIEF STIFLED S&L FEARS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, January 16, 1993                   TAG: 9301160101
SECTION: BUSINESS                    PAGE: A-10   EDITION: METRO  
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short
FED CHIEF STIFLED S&L FEARS
Former Federal Reserve Chairman Paul Volcker said Friday he could have warned more forcefully about problems in the savings-and-loan industry, but was worried about panicking depositors.
"For someone in my position at the time . . . if you shout fire, you may get fire. You may blow a little oxygen on the smouldering blaze," said Volcker, who was Fed chairman from 1979 to 1987.
Volcker appeared during the second day of public hearings by the National Commission on Financial Institution Reform, Recovery and Enforcement.
The eight-member commission, created by the 1989 S&L bailout law, begin operating last summer but did not hold its first public hearing until Thursday.
Friday, Volcker said his speaking out might not have been enough to counter the strong push for deregulation that was sweeping through government. "There were enormous political pressures developing," he said.
Lawrence Taggert, California S&L commissioner from 1983 to 1985, admitted he tried to thwart a federal effort to crack down on S&Ls' speculative investments and rapid growth. He said some of the speculative investments were good.

by Bhavesh Jinadra by CNB