Charles A. Bowsher: The Budgetary Treatment of the Proposed Resolution Funding Corporation (REFCORP)

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Charles A. Bowsher: The Budgetary Treatment of the Proposed Resolution Funding Corporation (REFCORP)

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Abstract

An important feature of the administration’s proposed approach, reflected in recent weeks in H.R. 1278, “The Financial Institutions Reform, Recovery and Enforcement Act of 1989,” is the creation of an off-budget, government-sponsored enterprise (GSE) to raise funds for a new on-budget federal corporation created by the same legislation, the Resolution Trust Corporation (RTC). The latter would be responsible for resolving currently insolvent savings and loan institutions and those which become insolvent during the 3 years after enactment of the legislation. The HTC would use funds provided by REFCORP [Resolution Funding Corporation].

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