The House Banking Committee's financial reform bill, by stripping bank regulators of the power to keep banks out of risky businesses, would turn them into "Keystone Kops" running after malefactors with cease-and-desist orders.
So says Rep. John Dingell in letters to Federal Reserve Chairman Alan Greenspan, Treasury Under Secretary John D. Hawke Jr., and Securities and Exchange Commission Chairman Arthur Levitt Jr.
The Michigan Democrat asked the regulators to provide detailed answers to nine questions on the impact of legislation to let banks merge with securities, insurance, and nonfinancial firms, and enter new businesses without regulatory approval.
Among the assignments: Provide charts and a written explanation identifying all complaints and enforcement actions against banks for securities transaction violations in the last 10 years.
Why? The Commerce Committee's top Democrat said bank regulators go easy on depository institutions that break securities sales rules, while the SEC aggressively punishes wrongdoers.
Rep. Dingell also asked whether deposit insurance coverage should be cut back. The regulators have until Friday to respond to the Aug. 7 letter.
Donald T. Vangel has given up his post as the Federal Reserve Bank of New York's senior vice president for bank supervision to join the risk- management practice at accounting giant Ernst & Young.
"The whole industry is struggling with the challenge of comprehensive risk management," he said. "The challenge is that risk management does not remain constant. It is dynamic to a fault. You need to continually assess the full gamut of risks."
Harold A. Stones retired from the top staff job at the Kansas Bankers Association last week with a bash at the Boardmoor, the Colorado Springs resort. Mr. Stones' next assignment: special projects director for Sen. Pat Roberts.
"Harold Stones brings to my staff a broad background in finance and economic development," the Kansas Republican said. "He will play a key role in helping Kansas make use of available federal resources." Mr. Stones will continue to live in Topeka.
