Comptroller of the Currency John D. Hawke Jr. on Monday asked state banks to oppose the limits that financial reform legislation would place on national banks.

"Any apparent advantage for state banks may be short-lived," he warned in a speech to members of Women in Housing and Finance. "Once the precedent is established of accepting anticompetitive provisions ... everyone is fair game."

Bills pending in Congress to update financial laws would bar national banks from conducting new businesses in direct subsidiaries. Instead, activities such as insurance underwriting would have to be walled off in bank holding company units.

"I'm sure there are some state banks that might welcome and support these provisions," Mr. Hawke said. "It's hard not to feel like a winner when you come out ahead of the other guy."

Mr. Hawke said the health of the country's banking industry depends on fair competition between state and national banks.

"For more than a century, the fortunes of state and national banks have been inextricably linked," he said. "Without the competition we provide each other, without the stimulus we generate to improve and innovate, we may all be threatened with stagnation."

Mr. Hawke said he doubts whether "it is going to be possible to get good legislation."

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