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BANK STOCK SPECIALISTS PROPOSE REGULATORS ADDRESS PROFITABILITY ALONG WITH SAFETY

 NEW YORK, April 20 /PRNewswire/ -- "Regulators should be required to take profitability into account alongside of safety and soundness. They should develop a measuring system whereby the most stringent and restrictive examiners and supervisors are identified and guided to a more pro-profit orientation."
 So says Eugene J. Sherman, the newly appointed director of research of M.A. Schapiro & Co., Inc., in the firm's revitalized "The Bank Stock Quarterly," a publication of high standing for many years.
 Mr. Sherman recognizes that the proposal would be a sharp departure from traditional notions of regulation, but he believes that regulation is growing evermore demanding and voracious and, therefore, needs a new mindset. In his view, aggressive regulation is eating into profits and, to some extent, restraining credit expansion.
 Speaking on behalf of the firm, which specializes in bank stock market-making and underwriting, Mr. Sherman recommends that regulators establish standards of profitability consistent with safety and soundness and develop measures, or a matrix, of appropriate risk- adjusted returns. He acknowledges that this would be an enormously complex task that would take time and testing, and in the end the complexities might overwhelm the goal.
 Nevertheless, Mr. Sherman believes that there would be two advantages in making the effort. The first would be to have regulators focus on the profitability issue and the impact that they are having on bank returns. Secondly, by establishing quantitative measures, the regulators would be able to identify those examiners who are being consistently and systematically the most aggressive and restrictive. This would be a way, he says, to address the claim by many bankers that some examiners are overzealous and that regulation is uneven.
 Copies of The Bank Stock Quarterly can be obtained by writing to:
 Mr. Eugene J. Sherman
 M.A. Schapiro & Co., Inc.
 One Chase Manhattan Plaza
 New York, N.Y. 10005
 M.A. Schapiro & Co., Inc., founded in 1939, is an underwriter of bank securities and maintains active markets in the shares of many of the country's top banking institutions.
 -0- 4/20/93
 /CONTACT: Eugene J. Sherman, senior vice president and director of research of M.A. Schapiro & Co., Inc., 212-530-7580/


CO: M. A. Schapiro & Co., Inc. ST: New York IN: FIN SU: ECO

TM-WB -- NY003 -- 7876 04/20/93 09:45 EDT
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Publication:PR Newswire
Date:Apr 20, 1993
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