Magazine article American Banker

Pros and Cons of a Clinton Win

Magazine article American Banker

Pros and Cons of a Clinton Win

Article excerpt

True nationwide banking could become an early reality - helping bank stocks - if Gov. Bill Clinton were elected President.

But the tradeoff, analysts said, might be a strengthened Community Reinvestment Act, with bankers obliged to step up urban-renewal financing. That would be less likely if President Bush returns for a second term.

Bradford M. Johnson, a banking analyst in Atlanta for Sterne, Agee & Leach Inc., said nationwide banking legislation could be enacted before the end of 1993 if the Arkansas governor is elected. He thinks the absence of U.S. institutions from the ranks of the world's largest banks could spur action under a Democratic administration headed by Mr. Clinton.

Source of Stock Profits

"It may be dangerous to be sticking our neck out this far this early, but extraordinary profits in the stock market do, after all, come from thinking ahead - and being right," Mr. Johnson said.

Frank J. Barkocy, an analyst in New York for Advest Inc., agreed that a Clinton victory, coupled with retention of Democratic majorities in Congress, "could speed up the timetable for nationwide banking."

A Bush triumph would mean continuity in leadership at bank regulatory agencies but no improvement in strained presidential relations with Congress.

Moreover, noted Fred W. DeBussey of Fitch Investors Service Inc., the President does not seem inclined "to accommodate major banking initiatives."

But President Bush could, as he has been asserting recently, focus his second term on domestic economic issues. While this might not offer near-term benefits for banks specifically, it could be positive for them later on.

The problem for both candidates, Mr. DeBussey noted, is that "the savings and loan bailout continues to cause banking legislation inertia in Washington. …

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