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To: accountclosed who wrote (22016)	2/26/1999 5:41:00 PM
From: Ilaine	Respond to of 86076

AR- re: SF Fed warning - I suspect that it has to do with pending legislation on bank reform. A couple of weeks ago Greenspan was speaking to House Finance Committee (or Senate, not sure, I was in the car) where he was warning that the problem with allowing banks to diversify into the investment business is the subsidy which private industry would thereby get from FDIC. It would give an unfair advantage. And the "moral hazard" argument, which is basically the unfair advantage argument looked at from a different direction, I think. I think the timing is coincident with the present sell-off, but doubt cause and effect.