IT IS TIME someone said it out loud: the thrift industry can no longer be justified as an entity separate from banking. It has been in crisis for nearly a decade. While there are certainly some healthy thrift institutions, there are so many weak and dying ones that they can no longer be sustained by any existing mechanism. The industry’s entire net operating income—pre-tax earnings before loan losses—was probably no more than $1.5 billion in 1988. A significant further rise in short-term interest rates would more than erase that income. The industry’s entire equity capital is stated at $28 billion, but much of this figure represents useless assets such as good will. Overall, the industry’s interest-bearing liabilities exceed its interest-earning assets by $78 billion.