Academic journal article ABA Banking Journal

Bit by Bit, Glass-Steagall Wears Down

Academic journal article ABA Banking Journal

Bit by Bit, Glass-Steagall Wears Down

Article excerpt

Washington is sending positive sig- nals for banks of all sizes that want to offer securities products. Now SEC chairman. Certainly one good sign is Richard Breeden's selection to head the Securities and Exchange Commission. Breeden was a principal architect of the President's thrift-rescue legislation, now the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

Breeden is no stranger to Washington or to banking and securities matters. The Harvard Law School graduate and former securities lawyer served in the early 1980s as executive director of then-Vice-President Bush's panel on financial institutions.

He has long been a supporter of regulation by function. In keeping with this philosophy, he can be expected to seek greater SEC oversight of bank holding companies' securities activities. ABA has said bankers would likely accept functional regulation if accompanied by broader access to securities sales and underwriting.

More signs. There are other hints that the administration supports changes in the Glass-Steagall Act. In late September, David C: Mulford, under secretary of the Treasury, told a House Banking Committee subcommittee that the administration was looking at some sort of Glass-Steagall overhaul. He said it might have specific recommendations ready by the end of 1990.

ABA has argued at repeal 6r reform of Glass-Steagall is necessary so smaller banks can engage in securities selling and underwriting. …

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