"Mandatory early intervention" could be the catchphrase of the year as proposed new laws shape at what point government regulators must bandage up troubled banks, according to Changing Times, the Kiplinger Magazine.

The idea is to eliminate regulators' discretion - and potential charges of favoritism - and to peg bank examiners' actions to a worsening in a bank's ratio of capital to assets. When the ratio falls below certain thresholds, the bank must take some medicine - suspend dividends to shareholders or sell off operations. The weakest banks, or those that don't cooperate, could be forced to merge or be seized and dismantled. Some form of this could become law in 1991 or 1992.