N.Y. FED PRESIDENT URGES BANK REFORM
New York Federal Reserve President E.
Gerald Corrigan said he favors bank reform but wants to
maintain the separation of banking and commerce.
    "As I see it, the case for fundamental reform in our banking
and financial system is compelling," Corrigan told the Senate
Banking Committee.
    Corrigan said he believed bank reform should allow banks to
offer a broad range of banking and financial services.
    He said common ownership of banks, thrifts, securities
firms and insurance companies should be allowed but commercial
firms should not own or control insured depositories.
    Committee Chairman William Proxmire (D-Wisc) said he would
press for bank reform legislation this year and supported
giving banks new power for commercial paper, mortgage-backed
securities, municipal bond underwriting and mutual funds.
    Former Citicorp Chairman Walter Wriston said bank reform
should reflect the reality that other companies were offering
banking services such as checking accounts credit cards and
mortgages.
         
    "The reality is that there is one-stop financial shopping at
banks in some states, but not in others," Wriston said.
    "There is also one-stop financial shopping in all 50 states
at a Sears store or American Express office."
    "We must find ways for banks to deliver new products to new
customers in order to maintain a spread of risk in a business
that is rapidly losing traditional products and customers," he
said.
    But John Weinberg of Goldman, Sachs and Co said allowing
banks to enter the securities business would make banks too
powerful.
 Reuter
