Prospects Rise in '87 for Financial Reform, New Banking Industry Powers/boesky Scandal, Fslic Funds May Be Key for Senate Democrats
Nathaniel C. Nash, N. Y. Times News Service, THE JOURNAL RECORD
WASHINGTON - The call for financial reform and for new banking industry powers has echoed through the halls of Congress for the last four years. And every year, the predictions of major new legislation have gone unfulfilled.
This time, the predictions may well come true.
The catalysts for a series of legislative reforms in the 100th Congress, according to lawmakers, lobbyists and banking regulators, are worries about the integrity of the nation's securities markets raised by the Ivan F. Boesky insider-trading scandal, pent-up demand for big changes in allowable banking services and the precarious condition of the government's fund that insures deposits at the nation's thrift institutions.
They add that with the rise to am Proxmire as head of the banking committee, the two congressional chambers should be able to avoid some of the bitter disputes that were characteristic of the last four years, when new legislation died for lack of a consensus.
``For too many years, the courts, regulators and state legislatures have made all the decisions on restructuring the financial system,'' Proxmire said. ``But if the system is to be changed or preserved, only the Congress should make those decisions.''
``I think this is the year for major financial legislation,'' said Rep. Charles E. Schumer, the Brooklyn Democrat. ``Too much has happened in the industry to keep the status quo.''
Schumer and others predict that Congress will pass a series of banking laws, including a financial rescue of the Federal Savings and Loan Insurance Corp.; a ban on limited-service banks; the granting of new underwriting powers for banks, and a requirement that banks clear checks much faster than they do now.
``Some of the most outrageous and scandalous behavior in the history of our securities and banking systems has occurred during the past several years,'' said John D. Dingell, the Michigan Democrat who is chairman of the House Energy and Commerce Committee. ``Obviously, the time has come to improve enforcement of our existing laws and to revise some of those laws to address the sorts of knavery and thievery we have seen.''
Even so, the outlook for new laws limiting corporate takeovers is uncertain. Though Boesky's $100 million settlement with the Securities and Exchange Commission highlighted to many lawmakers a takeover trend gone wild, there is nothing near a consensus on passing restrictive securities laws, legislative experts say. …