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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (23432)	2/12/1999 12:13:00 AM
From: flickerful	Respond to of 50167

GREENSPAN: Banking laws to be modernised....ft/11.2.99 By Our Summaries Staff Alan Greenspan, US federal reserve chairman, on Thursday reaffirmed his support for Republican legislation to modernise the US financial system, saying failure to implement the bill would "undermine" the competitiveness of US companies. Testifying to the House Committee on Banking and Financial Services, Mr Greenspan said it was crucial to overhaul depression-era laws that prevented competition between banking, brokerage and insurance companies. He told the committee that financial companies had had to take costly and elaborate steps to deliver new financial products and services in a manner that was consistent with outdated laws. The costs of these efforts were becoming increasingly burdensome and served no useful public purpose, he said. "Unless soon repealed, the archaic statutory barriers to efficiency could undermine the global dominance of American finance as well as the continued competitiveness of our financial institutions and their ability to innovate and to provide the best and broadest possible services to US consumers," he said. The bill, sponsored by Jim Leach, Banking Committee chairman, would allow new banking powers in a bank holding company structure, regulated by the Federal Reserve. A Democratic alternative, supported by President Bill Clinton, would allow new powers in operating subsidiaries of banks. Mr Greenspan clearly favoured the Republican model saying that the operating subsidiary route would "lead to greater risk for the deposit insurance funds and the taxpayer". He urged the Banking Committee not to let the tug-of-war between Republicans and Democrats get in the way of the central legislation. "It would be a disservice to the public and the nation if, in the fruitless search for a bill that pleases everyone in every detail, the benefits of this vital consensus are lost or further delayed," he said. Focusing on technological advances, the federal reserve chairman said it was becoming increasingly evident that changes in technology had significantly altered the structure of domestic and global finance, rendering existing modes of supervision and regulation obsolete. He said: "Banks, of course, will still need to be supervised and regulated... My point, however, is that the nature and extent of that effort needs to become more consistent with market realities."