Richard L. Thomas, chairman of First Chicago Corp., last month addressed a conference sponsored by the Federal Reserve Bank of Chicago about the effects of the Federal Deposit Insurance Corporation Improvement Act of 1991 on banks. His remarks are excerpted here.

The practical effect of FDICIA is to limit the latitude of the regulators and to micromanage the banks. We should not forget that there are costs associated with such increased regulation. They may be marginal with each new regulation or each new supervisory action, but their effect is cumulative and real over time.

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