Magazine article American Banker

Regan Assuages Bankers' Fears on Continental

Magazine article American Banker

Regan Assuages Bankers' Fears on Continental

Article excerpt

CHICAGO -- Treasury Secretary Donald T. Regan on Friday attempted to mitigate the uncertainty that developed in the banking industry last week following rumors about the financial stability of Continental Illinois Corp.

Mr. Regan, speaking to reporters in Washington, said the government would protect the integrity of the banking system at all times and under all circumstances.

The secretary refused to comment specifically, however, on the situation at Continental Illinois.

Continental, the eight-largest bank holding company in the country, last week struggled to fend off persistent rumors of insolvency, merger, or acquisition.

The rumors battered the Chicago company's stock price, particularly last Thursday, when heavy trading drove the price down to a 52-week low of 11-1/8. At Friday's opening, Continental sold at 12 and climbed in moderately heavy trading to be 12-5/8 by early afternoon.

The rumors swirling around Continental led to a considerable market uncertainty about othe banking companies as well.

Mr. Regan's comment came a day after the comptroller of the currency, C. Todd Conover, labeled as untrue a Japanese news agency report that the Comptroller had sought aid for Continental from a Japanese bank. In his statement, Mr. Conover said he "was not aware of any significant changes in the bank's operations, as reflected in its published financial statements, that would serve as a basis" for those rumors. Taylor Assails Wire Services

Also late Thursday, Continental's chairman and chief executive officer, David G. …

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