Iowa Insurance

Giving a broad effort to rewrite the rules, banks have separated from the rest of the nation’s financial systems, the Speaker of the House Commerce Committee, said today that it has not been able to negotiate a compromise to allow mergers between banks and insurance companies.

The decision of the President, representatives of Thomas J. Bliley Jr. of Virginia, is a major setback for insurers and banks, and many Republicans, whose house of deregulation leading to the hard ask for a reduction of legal barriers to American balkanized financial system for six decades.

Led by Richard H. Baker representative, a three-term Republican from Louisiana, the great advocate of deregulation had initially sought for the merger of banks, securities firms, insurance, industry and even companies like General Motors. And this spring, the Clinton administration proposed law, the merger of banks with investment firms and insurance companies.

But the bill now appears that the peak of passage in the house is the smallest, taking into account - only the elimination of barriers in place, in an era of depression extent, the Glass-Steagall Act of 1933, who separate banks and securities industry over 60 years.

Today’s decision is a victory for officers feared that to a large extent the turnover of insurance in banks borrowed to their livelihoods. Officials also have influence on the number of Capitol Hill because so many of them are local politics and in the committees’ finance campaigns Congress.

But the absence of a compromise on the question of insurance could harm the bill for long-term prospects for passage. Many securities firms associated with insurers - Donaldson, Lufkin & Jenrette, for example, the Equitable Companies. These securities firms would not be allowed to merge with banks, unless this bill by Parliament to amend.

The Securities Industry Association will decide whether to support the bill in light of the decision by Mr. Bliley, “said Marc E. Lack Ritz, the chairman of the trade group. “We are very disappointed by this development,” he said. “Unfortunately, this means exclude a substantial portion of the securities industry already associated with insurance companies from participating in banking markets.”

Mr. Bliley said at a hearing held this morning, it was not enough cast to approve mergers of banks and insurance companies. “It has been shown to me that the approach of a port is not feasible at this time,” he said. “The parties are too far apart, and their commitment to their viewpoints set for such an approach manages to make.

Mr. Bliley said that “the continuation of insurance-membership issues, it is now clear that this would endanger” window of opportunity “to adopt historic legislation modernizing our financial services sector.”

The Senate has not yet responded to the question of financial deregulation, Mr. Senator Alfonse D’Amato, a New York Republican and chairman of the Banking Committee, waited to see what would the house. Mr. D’Amato introduced a bill earlier this year that the proposal by Mr. Baker for a wide deregulation.

But enthusiasm for such a comprehensive approach has declined in the Senate as well. If the house of a bill is limited to lifting the ban Glass-Steagall of the Bank Securities and mergers, then the Senate could follow.

Some issues, such as trading house committee tries to stop work on the bill by its deadline until June 22. The insurance agents and companies are always insists on changes, by the authority Comptroller of the Currency to allow Federal-chartered banks to sell certain types of insurance. The regulatory authority, public insurance commissioners are often insurance companies and agents are close to the industry.

Banks are strongly opposed to any new border.

Mr. Bliley’s frustrated allusion to the division, under the direction of the institution seemed to refer in particular to representative Gerald BH Solomon, Upstate New York, a Republican and former insurance agent, he was chairman of the House Rules Committee. The two men unilaterally with organizations representing Jim Leach of Iowa, the House Banking Committee chairman, to find a close deregulation.