Chicago Banks Hit |Too Big to Fail'
CHICAGO - A group of Chicago-based bank holding companies has vowed to vigorously oppose the "too big to fail" doctrine.
Under that policy, the Federal Deposit Insurance Corp. guarantees all deposit and nondeposit liabilities of banks whose survival the government considers essential to the national economy.
The banking companies said this week they formed the Bankers for Fairness Committee to oppose the policy, charging that it "questions the credibility of the system" because it favors some banks over others solely on the basis of size.
Top Lobbyist Is Chosen
Former Illinois Gov. James R. Thompson was tabbed to lead the banks' lobbying effort. He is a partner in the Chicago law firm Winston & Strawn.
The committee is headed by Kenneth A. Skopec, president of Mid Citco Inc., a holding company with assets of $1.23 billion. Mid Citco is parent of Mid-City National Bank of Chicago, First National Bank of Morton Grove, Bank of Elmhurst, and Union Bank and Trust Co., Oklahoma City.
Mr. Skopec said the committee recognized that the federal government was responsible for the health of the nation's banking system, but he said the coalition believes the decision to bail out a bank should be made only at the highest levels of government.
He said the committee would not oppose a narrow exception that would allow help for a failing bank if so ordered by the President on the joint recommendation of the secretary of the Treasury and two-thirds of the board of governors of the Federal Reserve System.
Mr. Skopec said the committee "believes that neither the FDIC nor taxpayers can continue to afford to provide full insurance protection to some selected banks."
Other members of the fairness committee are Continental Bank Corp., Lake Shore Bancorp Inc., and Advance Bancorp Inc.