House Banking Committee Chairman Jim Leach in Tokyo on Friday used the Asian economic crisis as an opportunity to repeat his warning against nonfinancial firms' buying commercial banks.
"The chaebols of Korea, the keiretsus of Japan, and cartels of Indonesia have lessons for the United States," Rep. Leach told a group of Japanese executives. "Those who today actively advocate financial modernization legislation in Congress which mixes commerce and banking might want to take a hard look at the kinds of conflicts of interest endemic to systems that have allowed such mixing."
Rep. Leach returns to the United States today from a 10-day Asian tour. Now that he's had a firsthand look, House Banking has scheduled hearings on the region's financial troubles for Friday and Feb. 3.
Lobbyist Marty Farmer, a fixture on Capitol Hill for more than 25 years, is looking for work now that NationsBank Corp. has completed its acquisition of his employer, Barnett Banks Inc.
"I don't really intend to retire," Mr. Farmer said. "Clearly, Nations did not offer me a position."
Though the two institutions may have been a good business fit, NationsBank and Barnett were on opposite sides of the debate over financial services reform.
Ricki Helfer has signed on as a senior fellow at the Brookings Institution. The former Federal Deposit Insurance Corp. chairman will research ways to improve the oversight of financial institutions in emerging market countries and coordinate global regulatory standards.
In a four-page article on the year-2000 problem, Money magazine advised readers of its February issue to find out whether their bank's computers will be reprogrammed before Jan. 1, 2000.
"If you can't get this assurance by the end of 1998, shift your money into a national bank," Money advised. "Not only is it more likely to have completed Y2K fixes, but the Fed (Federal Reserve) is prone to give it top priority for bailouts if problems do occur."
Ouch.
Don't tell state-chartered banks like Chase Manhattan Bank that the Fed- er, make that the Federal Deposit Insurance Corp.-is more likely to bail out Citibank, which holds a national charter.
Money's gaffes have state regulators seeing red.
"This article shows a total lack of understanding of banking and how the system operates," said Neil Milner, president of the Conference of State Bank Supervisors. Mr. Milner asked for a retraction in a Jan. 22 letter to the magazine.
The stars were aligned Wednesday for the long-awaited Supreme Court decision in the AT&T Family Federal Credit Union case. The horoscope for Michael F. Crotty, deputy general counsel for litigation at the American Bankers Association, read: "Short trip required to pick up legal papers."
But the justices did not come down with a ruling, so Mr. Crotty never took the 15-minute cab ride to the Supreme Court. The next chance for the opinion is today. After that, the court is in recess until Feb. 23. u
