Iowa Insurance

The Clinton administration plans, you can call this week for legislation, so that commercial banks, investment and insurance companies merge and form large financial services companies provide that any transfer of funds from accounts d investment and life insurance, federal officials say.

In a speech prepared for delivery at New York on Monday and in Congressional testimony scheduled for Wednesday, Treasury Secretary Robert E. Rubin is the Congress calls for the lifting of the Depression era Glass-Steagall Act, said the official. For over 60 years, the law of funding has forced to choose between the concerns of commercial banks own or hold the securities of companies such as brokerage companies and investment banks, but not both.

Mr. Rubin also plans to require changes in the large bank Holding Company Act of 1956, it has actually prescribed by most financial interests have both commercial banks and insurance companies, said officials of the Federal Republic, spoke on condition of anonymity. Mr. Rubin is the floor for the first time that the terminal is the point of view of eliminating legal and regulatory barriers to the financial industry.

The regulatory changes in recent years have already allowed banks such as Citibank, to begin selling shares and investment funds on a limited basis. But the Glass-Steagall Act bars still Citibank, for example, merged with a company as brokerage Merrill Lynch or an investment bank such as Goldman, Sachs, the investment advisory company, helping companies issue stock. The Bank Holding Company Act bars Citibank fom merger with a large insurance company Prudential comment.

The management plan would be to admit that such treaties, provided it meets agreements with the laws. The plan would be the way for further consolidation of the financial system.

Given that many Representatives and the Senate Republicans already want to allow the merger of commercial banks and investment banks, members of Congress, said the rates were high, that the nature of the legislation to make it happen in during this meeting of Congress. “I think it is very probable,” said Republican representative Jim Leach of Iowa, he is Chairman of the House Banking Committee and already has a bill to abolish Glass-Steagall.

It remains less clear whether the management to succeed, so that commercial banks to merge with insurance companies. Mr. Leach has strongly resisted the idea in the past, but said in an interview Friday evening, he was prepared to issue its commission.

However, some Republicans want to go much further than the hotel, so that each company, including insurance companies and companies outside the financial sector after the reunification with the banks.

Proponents of a further consolidation of the competition will say, go charges for anything that is of current accounts at the market close. Opponents say the giant companies could lead, in all likelihood, is not sensitive to the needs of individuals and small businesses.

All plans, taking into account, require that federal funds insured deposits may be used only in commercial banks, and not in the business of securities or other sectors. But some critics have raised the question of whether such rules can be enforced and warned that the possibility of a proper combination of banks with other sectors could lead to costly Federal bailouts.

The risks of trade in securities were presented today at Barings PLC, a British bank that the old USA, reveals that only a professional, have lost all of the capital of the bank, while betting on direction of Japanese stock prices.

Significant differences remain between the administration and planning Republicans competing proposals. The details are mine Lobbyists for small banks and insurance agents against the large banks, investment firms and insurance companies.

The Federal Reserve, which blocks a management plan last year for the consolidation of bank regulators charge of the combination of business and investment banks, but rather the regulatory authority about these combinations as hotel or give many Republicans.

Mr. Leach is under pressure from younger members of the Republican Congress, want much broader deregulation. Representative Richard H. Baker, a Republican, head of the house in LA Banking Committee’s panel on capital markets and securities, already has a bill, which allows mergers between commercial banks, investment banks, insurance companies and not companies like General Motors or AT & T.

Mr. Senator Alfonse D’Amato, Republican of New York, head of the Senate Banking Committee, is entitled to the same Senate with Mr. Baker’s.