Fed will allow banks to buy healthy thrifts

WASHINGTON The Federal Reserve Board voted Thursday to permitbank holding companies to buy healthy thrift institutions, a decisionexpected to accelerate the shrinkage of the savings industry and theexpansion of interstate banking.

The 6-0 vote culminated a bitter, two-year struggle amongfinancial industry groups seeking to influence the central bank'sruling.

But it also is something of an anticlimax because S&L bailoutlegislation signed into law two weeks ago authorized the Fed to makethe decision and members of Congress clearly expected it would.

Under the federal regulatory scheme, banks and savingsassociations were kept separate until 1982, when …