Last week’s autopsy by the Treasury Department’s inspector general of the collapse of IndyMac Savings and Loan offers insight into a Washington back alley brawl between banking regulators.

The audit blasts the Office of Thrift Supervision, which serves as the primary regulator for S & Ls;, for not taking a tougher enforcement stance on the bank. Until the OTS acted, the Federal Deposit Insurance Corporation, which operates the fund that pays for bank failures, could only stand by helplessly and watch.

In the debate over how aggressive regulators should be in examining troubled banks, it has usually been the FDIC against all comers. The other banking regulators tend to be more concerned about avoiding the disruption that comes from a bank failure than the FDIC, which has its insurance fund to protect.

IndyMac exposed the rift between the OTS and the FDIC when the OTS allowed the savings and loan to take extraordinary measures to stay afloat, and then failed to level with the FDIC about what it had done.

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