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U.S. INTEREST RATES NOT NECESSARILY LIKELY TO RISE, MAY BE INFLUENCED BY FOREIGN FACTORS, SIA ECONOMIST SAYS

 NEW YORK, Oct. 1 /PRNewswire/ -- United States interest rates aren't necessarily likely to rise in the near-term and are likely to be influenced by several foreign factors, Jeffrey M. Schaefer, a Securities Industry Association senior vice president, said Friday in remarks prepared for delivery to the association's sales and marketing conference here.
 In addition, Mr. Schaefer suggested the industry consider instituting a savings and investment program through the school system to "generate a savings culture that is badly needed in the country."
 Although noting the difficulty of predicting interest rates, Mr. Schaefer told the conference he believes the demand for capital will increase as firmer "command economies such as China, and developing nations in Latin America, open up and seek foreign capital."
 But, he said, "more capital seems to be available, particularly with countries and companies no longer willing to borrow as heavily as they did earlier, leaving more and cheaper funds available to the private sector.
 "If most of the downsizing and restructuring is completed in the U.S., the lower cost of funds should allow for more investment," said Mr. Schaefer, who heads SIA's research area.
 "We are wringing out much of the excess of the 1980s with considerable pain. Many of our competitor countries still have to go through this process.
 "The cost of funds in the 1990s (therefore) may well resemble more the 1960s and 1970s then the 1980s," he said.
 The prime rate, the rate banks charge their most creditworthy customers, ranged between 4.5 percent and 12.7 percent from 1960 to 1979, and ranged between 18.9 percent and 8.2 percent from 1980 to 1989, SIA said.
 Urges School-Based Savings
 Turning to the need to generate a savings culture in the United States, Mr. Schaefer urged sales and marketing executives to institute a program similar to that several decades ago which enabled elementary school children to regularly save through passbook savings programs.
 Such a program would eventually enable the industry to reach a larger customer base and match the industry's efforts to focus on longer run goals and objectives than shorter term problems only.
 -0- 10/1/93
 /CONTACT: Art Samansky or Karen San Antonio of Securities Industry Association, 212-608-1500/


CO: Securities Industry Association ST: New York IN: FIN SU: ECO

TW -- NY020 -- 7679 10/01/93 09:51 EDT
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Date:Oct 1, 1993
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