Magazine article American Banker

Big-Bank Trade Group Keeping Leach on Ice over Glass-Steagall

Magazine article American Banker

Big-Bank Trade Group Keeping Leach on Ice over Glass-Steagall

Article excerpt

After a week of internal skirmishing, the Bankers Roundtable still doesn't have an answer for Jim Leach.

The House Banking Committee chairman needs the big-bank trade group's support to convince Republican leaders to schedule a vote on his Glass Steagall reform bill.

Though the bill has been the group's top priority for eight months, divisions within its ranks have prevented it from backing the Iowa Republican.

"It's been extremely frustrating for those of us who want to see the process go forward," said one lobbyist for a Roundtable member bank that supports the bill.

From Wednesday through Friday last week, Rep. Leach waited in vain for the group to send word, which had been promised. Instead, the group's 22 board members haggled among themselves, ripping up draft after draft of a letter.

The Roundtable's indecision peeved Rep. Leach and frustrated the banks that support the bill, including NationsBank, Morgan Guaranty, Banc One, Fleet Financial, Norwest, and Bankers Trust. They argue the group should provide the unanimous voice that big banks can't get in the larger American Bankers Association.

"Why is there a Bankers Roundtable? If they can't support this bill, why don't we just have the ABA?" asked another lobbyist for a bank supporting the bill.

Despite the delay, some Roundtable members insist the group will ultimately back Rep. Leach's effort. But to appease holdouts, sources said the group is likely to demand new provisions. These may include allowing bank holding companies - not just nonbanks - to own uninsured wholesale financial institutions. …

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