Failed Bank: FDIC Sale of CrossLand Conservatorship Satisfied Least-Cost
Test (Letter Report, 04/20/94, GAO/GGD-94-109).

CrossLand Federal Savings Bank in Brookland, New York, represents the
most costly bank failure since the passage of the Federal Deposit
Insurance Corporation (FDIC) Improvement Act of 1991. FDIC estimates the
cost of the CrossLand failure to the insurance fund at nearly $890
million.  GAO concludes that FDIC's decision to sell the CrossLand
conservatorship to institutional investors through a public offering
complied with the law's least-cost calculation and documentation
requirements.  FDIC did not, however, realize the $517 million in
projected cost savings from its January 1992 decision to take interim
ownership of CrossLand upon its failure and run it until a decision on
final resolution was reached.  The alternative was to sell the bank's
insured deposits and other liabilities but none of its assets to an
acquirer.  FDIC now pegs those savings at about $333 million.  FDIC
officials said that the projected savings were not realized mainly
because CrossLand's assets proved to be in worse shape than indicated in
FDIC's initial valuation before the January 1992 resolution decision.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-94-109
     TITLE:  Failed Bank: FDIC Sale of CrossLand Conservatorship 
             Satisfied Least-Cost Test
      DATE:  04/20/94
   SUBJECT:  Bank failures
             Financial management
             Documentation
             Insured commercial banks
             Banking law
             Financial institutions
             Statistical methods
             Cost effectiveness analysis
             Bank management
             Real estate sales
IDENTIFIER:  Bank Insurance Fund
             FSLIC Resolution Fund
             BIF
             
************************************************************************

We regret that the full text of this item is presently unavailable.

See the GAO FAQ - Section 2.0 for printed copy ordering information.
The FAQ is automatically retrieved with all WAIS search results or 
can be obtained by sending e-mail to: [email protected]