Printer Friendly

FORRESTAL CALLS FOR NEW MODEL OF REGULATORY REFORM

 /ADVANCE/ SEATTLE, June 1 /PRNewswire/ -- Technological forces have spurred increased competition between banks and nonbanks, calling for a new model of regulation, according to Robert P. Forrestal, president and chief executive officer of the Federal Reserve Bank of Atlanta.
 In an address to the annual convention of the Georgia Bankers Association, Forrestal explained that technological developments in banking are making regulatory approaches based on institution or function obsolete. "Banking reform can no longer be only banking reform; it must be financial services and regulatory reform," he said.
 Three forces are causing a radical reshaping of the financial services environment: the rise of securitization, increased competition from nonbanks, and the explosive growth of the derivatives market. Forrestal pointed out that since large corporations started the trend in the 1960s of securitizing their debt, other areas have become securitized, including mortgages and credit card receivables.
 In addition, the new technology of financial derivatives (such as futures, options and swaps) which allow banks and other entities to unbundle risks and hedge them, is transforming the industry. "At the same time that securitization is clouding the distinction between depository and non-depository financial institutions, derivatives are wiping out the distinctions between different types of financial markets," he said.
 Forrestal concluded, "In a high tech world, only a new model of regulatory reform can hope to keep up with the changes in products in the markets."
 -0- 6/1/93/1200
 /CONTACT: Tony Heffernan of the Federal Reserve Bank of Atlanta, 404-521-8748/


CO: Federal Reserve Bank of Atlanta ST: Georgia IN: FIN SU:

BN-RA -- AT003 -- 3823 06/01/93 09:48 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jun 1, 1993
Words:266
Previous Article:PYRAMID TECHNOLOGY NAMES JOHN CHEN PRESIDENT AND BOARD DIRECTOR
Next Article:ROYAL CROWN COLA'S GONE FISHING; SPONSORS 1993 RED MAN TOURNAMENT TRAIL
Topics:


Related Articles
Driven Patriot: The Life and Times of James Forrestal.
FLORIDA DEPARTMENT OF BANKING AND FINANCE AND FEDERAL RESERVE BANK OF ATLANTA AGREE ON EXAMINATIONS OF STATE-CHARTERED FEDERAL RESERVE BANKS
Driven Patriot: The Life and Times of James Forrestal.
ATLANTA FED PRESIDENT FORRESTAL TO RETIRE
FORMER ATLANTA FED PRESIDENT TO JOIN EQUIFAX BOARD
Pocantino Associates unveils Princeton office park development.
Princely deal in NJ.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters