BANKING / FINANCE : Funds to Insure Bank, S&L; Deposits Called ‘Under Stress’

The federal fund that insures deposits at the nation’s banks and savings and loans is “under stress� but “not stressed out,� a top regulator told about 400 Orange County bankers and accountants last week.

“The pace of failures should have slowed, but we have an uncooperative economy,� said Anthony Scalzi, western regional director of the Resolution Trust Corp., which operates and liquidates failed S&Ls.;

He said the nation’s troubled banks are “usually the squirts�--referring to small banks. He predicted that about 200 banks nationwide would fail this year. He also said that a major bank--he had no idea which one--will probably fail soon.

Scalzi was filling in for an ailing L. William Seidman, chairman of the Federal Deposit Insurance Corp., at a joint dinner meeting of the Orange County Bankers Society and the local chapter of the California Society of Certified Public Accountants.

Scalzi, a former banking regulator, said the increased premiums that banks pay to the FDIC for deposit insurance aren’t going down, but the higher premiums are “still a bargain.�

“The alternatives stink,� he said. “You can’t put up a sign saying ‘Not insured by the FDIC,’ and I don’t see us lowering insured accounts to $80,000 or $60,000� from the current $100,000 per account holder.�

Scalzi also told bankers that regulators probably will grant them broader investment powers to help them grow faster and compete with banks worldwide, but “if we’re going to increase the speed, we’re going to put more cops out on patrol,� he said, referring to stepped-up enforcement powers the regulators would get.