Leach says Congress will consider merging BIF and SAIF funds.
Leach said the recapitalization last May of the BIF, the growth of the deposited balance of the SAIF and the thrift industry's willingness to accept a sacrifice to restore the SAIF have put the BIF-SAIF issue on the forefront of the legislative agenda. Leach said the sacrifice would be in the form of a higher premium assessment to recapitalize the SAIF before a merger with the BIF The chairman said the thrift industry accepted a one-time assessment of $0.85 per $100 of insured deposits. "The public is not in the mood to accept any more obligations for the savings and loan disaster," said Leach. "But with this phased-in premium in the S&L industry, I think there will be a BIF-SAIF resolution."
The chairman also said there was a possibility that the House would pass legislation this year to reform the Glass-steagall Act. Enacted during the Great Depression to restrict the securities activities and affiliations of banks, Glass-Steagall has long been seen as having separated commercial banking from investment banking, an arrangement Leach said was "irrational" to continue. "Larger businesses have had to find the instruments of choice outside of commercial banking," said Leach. If larger banks were to maintain a relationship with their customers, they needed to offer investment banking instruments, he said. "Re-integrating commercial and investment banking will give the customer more choices." He also said smaller businesses would benefit as well, because smaller banks would be given the opportunity to offer investment banking services.
Leach said legislation to consolidate regulation of the banking and securities industries would head the committee's agenda in 1996. The committee also will consider legislation to strengthen oversight of the over-the-counter derivatives markets.
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|Title Annotation:||Rep. Jim Leach|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Nov 1, 1995|
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