Remarks

Abstract

In recent years the Congress has responded to industrial difficulties by enacting loan guarantee programs, first for steel and oil and gas, later for airlines and rural television services. Unlike programs passed two or three decades ago on behalf of the Lockheed and Chrysler corporations, these new programs are open to all qualifying companies within the specified industries. Companies can apply for a loan guarantee that covers most of the loan amount, usually in the range of 80 percent to 90 percent. In each of these four new programs, the Congress has created a board to judge the applications, and the boards have in turn hired a staff and outside consultants to analyze these applications and make recommendations on whether the specific applications should be approved. Because the programs involve credit markets, a Federal Reserve Board delegate has been appointed to the loan guarantee boards, and I have been that delegate for each of the four boards.