The Shadow Financial Regulatory Committee has now survived a decade of second-guessing the banking regulators.
But as it celebrates its 10th anniversary, the group of academics, lawyers, and bankers scarcely gets the attention it used to.
"Frankly, I wouldn't have guessed that we would have been around for the first 10 years," said George Bentson, a professor at Emory University and a founding member of the committee.
The group is always short of funds, he said. It survives on $25,000 in grants from the Sarah Scaife Foundation and Loyola University of Chicago. That must finance four two-day trips a year to Washington for its 13 members.
The committee also is attracting less attention. Its numerous policy statements used to grab headlines in The Washington Post and other major newspapers. Today, with the banking industry booming, only financial reporters attend most of its news briefings.
Its proposals also may not be having much impact.
John P. LaWare said the group did not affect his thinking during the seven years he sat on the Federal Reserve Board. "I rarely read their stuff," said Mr. LaWare, who left the Fed last April to join the Secura Group.
In fact, the committee's last major coup came five years ago when it developed the prompt-corrective-action doctrine. Lawmakers incorporated the idea, under which regulators close banks before they become insolvent, as one of the major tenets of the Federal Deposit Insurance Corporation Improvement Act of 1991.
L. William Seidman, the former FDIC chairman, said the committee was most influential in the late 1980s and early 1990s, when the bank and thrift crises were raging. He hasn't heard much from them lately. "I had assumed they had died of old age," he said.
They haven't. The members are still ready to poke another thorn in the regulatory hide. Scheduled for the once-over at today's meeting: bank powers, exam fees, and federal support of the government-sponsored secondary market agencies.
The members said they know these pronouncements won't have the effect their prompt-corrective-action recommendation did. The massive public bailout of the thrift industry created an unusual political climate. That doesn't exist today, members said.
"In the larger world of Washington, I think we are a rather small ripple," said Kenneth A. Scott, a professor at Stanford Law School. "But that is consistent with being influential at certain times on certain issues."
The group keeps in touch with key government officials through off-the- record briefings; one of its founding members, John D. Hawke Jr., is now Treasury under secretary.
Mr. Hawke said there is plenty for the group to consider during the next decade, including insurance and the need for market-based accounting. "I have great hopes that it will continue to be alive and relevant," he said.
The group began as an offshoot of a 1985 project on safe and sound banking commissioned by the American Bankers Association. Five researchers, including Mr. Bentson, George Kaufman of Loyola University, and Robert Eisenbeis of the University of North Carolina, decided to keep meeting. They added eight other members. Each must have a "preference for market solutions."
The group begins its sessions on a Sunday, meeting with a key policymaker at the offices of Furash & Co. here. It then hashes out policy statements. "There isn't any sort of pride of ownership," Mr. Bentson said. "People argue back and forth. But it is not haggling as in fighting. It is making it better."
