On February 6, 1989, the Federal Home Loan Bank Board contacted Mid
America Institute to inquire whether it would undertake an independent,
academically oriented analysis of the insolvency resolution crisis in
the thrift industry. The Senate Banking Committee, during the course of
hearings on the thrift crisis, had suggested to the Bank Board tile
desirability of an independent assessment of Bank: Board and FSLIC
resolution methodology, specifically as it related to the controversy
surrounding the December deals, the Southwest Plan, and the possibility
that tax considerations were driving certain deals. The Bank Board had
already initiated studies from industry-oriented perspectives.
Therefore, it felt that an academic perspective would provide both a
valuable addition to the process, and by the nature of academia, perhaps
the best prospect of a credible and independent viewpoint. The Bank
Board was prepared to give an appropriately structured Task Force
virtually unlimited access to all personnel, documents and resources
that the Task Force felt necessary to come to an uncompromising
assessment. The only significant constraint imposed was that a report
had to be available prior to the start of the next round of Senate
Banking Committee hearings on March 1, 1989. The Task Force would be
given complete discretion as to the scope and coverage of the report,
but it was requested that the topic of the December deals, particularly
the associated tax considerations, be a significant part of the report.
