The bank bailout

What must now be of concern in the federal rescue of the Continental Illinois National Bank is not the intervention itself - the fact that another rock has been dropped in the government bailout pool - but the long-range implications of that bailout:

In other words, what are the deeper ripples that will spread throughout the US and global banking systems?

For the short term, federal banking regulators could hardly have stood by and allowed the bank - the nation's eighth largest - to go belly up at a time when confidence in the banking system in general is at a relatively low ebb and following generally reduced earnings by major banks for the second quarter of this year. Continental, for its part, holds deposits from over 2,100 banks throughout the United States. To have let the bank collapse would have complicated, if not directly endangered, the financial positions of other, smaller US banks.

Continental, moreover, has long been one of the pillars of banking in the upper Midwest. That explains why political leaders from both parties in Illinois are now throwing their assent (however qualified) to the bailout. And looking far beyond the shores of Lake Michigan, many of the nation's largest banks have substantial loans to third-world nations. The collapse of Continental might well have precipitated fears about holding deposits - especially large certificate accounts of $100,000 or more - in banks with troubled overseas loans.

All that said, there are disturbing questions about the rescue package that warrant the thoughtful attention of the White House, Congress, and the American people.

A House committee will meet on the issue in mid-September. A Senate panel is also expected to take up the issue shortly.

Among issues that should be examined:

* Fairness. Does the $4.5 billion rescue package of Continental (using federal bank insurance assets) mean that only large banks - which tend to specialize in certificate accounts of $100,000 or more - will be bailed out while smaller banks, with accounts of less than $100,000, will be allowed to fail, as has happened in the past?

* Nationalization. The Continental rescue package, in dollar terms, is larger than previous rescue packages involving Penn Central, Lockheed, and Chrysler. In this case, it also amounts to a nationalization of sorts, since the Federal Deposit Insurance Corporation will now have ownership rights to 80 percent of the bank's equity. Do the American people really want to see the government become the bank stockholder of last resort - for whatever duration? And what about bailouts in general? The Reagan administration has carried the case for a ''free market'' economy. To what extent should the government prop up enterprises that fail in the marketplace?

* Regulation. Are bank regulatory agencies adequately monitoring their list of troubled institutions to head off future failures? Has bank deregulation - allowing savings-and-loans, for example, to offer more services in direct competition with large commercial banks - gone too far? Not far enough?

Continental, it might be recalled, faced severe restrictions on branch banking, which in part forced it to seek out large certificate accounts instead of smaller deposit flows. And what about the increasing intrusion of nonbanks (such as Sears or American Express) into bank-related services? How far should they be allowed to directly compete with banks? And should banks be allowed to get more and more into nonbank services, such as the sale of securities?

* Overseas loans. Do regulatory agencies have adequate plans worked out in event of major defaults by third-world nations? To what extent should banks be encouraged - as is now the case - to make additional loans to help debtor nations meet interest payments?

To raise such issues is not to criticize the American banking community. Most banks today offer a wide range of services not even contemplated three or four decades ago, when for most Americans a bank account meant just a simple checking or passbook savings account.

But it is precisely because the US banking community occupies such an important role in the nation's - and world's - affairs that government officials have an obligation to ask tough questions during the weeks and months ahead.

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