When it comes to expanding bank securities powers, the Federal Reserve Board turns to Scott G. Alvarez for advice.
Mr. Alvarez, one of four assistant general counsels, has emerged as the central bank's regulatory guru on the Glass-Steagall Act and Regulation Y.
"He is extremely helpful," says Susan M. Phillips, the Fed governor who chairs the board's supervision and regulation committee. "He exhibited amazing patience in trying to work through some of the details of the recent proposals."
The 1981 George Washington University law school graduate has spent his career in the Fed's legal department, including the last six years as one of General Counsel J. Virgil Mattingly's top lieutenants.
"I thought I would come here for a few years, learn about banking, and then go off and do something else," Mr. Alvarez says, "but it has been just too exciting to leave."
Mr. Alvarez's regulatory empire is vast. He is the point man on bank holding company matters, supervising a staff of 18 lawyers. Not only does he rewrite the rules, he also oversees all applications by holding companies to expand or add powers.
He works extensively with Mr. Mattingly and Fed Chairman Alan Greenspan on legislative initiatives, drafting proposals for financial modernization.
"It is people like Scott who give the board's staff its excellent reputation in government," Mr. Mattingly says.
During the past year, Mr. Alvarez has focused on the Fed's three biggest regulatory initiatives. He was responsible for revamping the securities underwriting rules, which the Fed adopted last fall. Those rules more than doubled to 25% the amount that section 20 units may earn underwriting corporate securities.
He also rewrote many of the firewalls that limit securities unit operations. These include dropping the ban on cross-marketing of underwriting and loan products and easing restrictions that prevented employees from working for both a bank and a section 20 unit.
For Regulation Y, Mr. Alvarez oversaw a complete rewriting of the rule, halving processing times for some merger applications, making it easier for holding companies to enter nonbanking businesses such as commercial leasing, and expanding opportunities for consulting and data processing work. u
