WASHINGTON--As the presidential candidates begin polishing their positions on banking issues, Arkansas Gov. Bill Clinton is being urged by supporters within the industry to endorse interstate branching.
|Bankers for Clinton'
In a positin paper prepared for the Clinton campaign, Karen Shaw, president of the Institute for Strategy Development, warns that "anachronistic product and geographical restrictions" have created a competitive disadvantage for banks.
The paper has not been endorsed as official Clinton policy. But Ms. Shaw is one of two people designated by the Democratic candidate to organize a "Bankers for Clinton" group, and her paper is likely to form the basis for the nominee's banking platform.
Also organnizing the group is Charles T. Manatt, a former banker and Democratic Party insider who is national co-chairman of the Clinton campaign.
Mr. Manatt would not say whether the Shaw paaper would become official policy for the campaign. However, he said there will be an "option paper" on banking issues. "Karen was good enough to do a draft to get the discussion started."
Ms. Shaw's paper, which has gone through several drafts, calls for "extensive financial industry restructuring."
But it is vague about which "product restrictions" should be removed. They could be anything from authority to sell mutual funds to repeal of the Glass-Steagall Act.
The criticism of "geographical restrictions" in the Shaw paper clearly refers to interstate branching barriers.
The paper also calls for government help in expanding secondary loan markets as a way of promoting credit availability, and it urges a "revitalization" of the Community Reinvestment Act, which Ms. Shaw said has become more focused on paperwork than results.
The Bush campaign has also been vague about what it wants to do in a second term, although over the past four years the administration took a stand on virtually every big banking issue.
An |Incongruous Relic'
In his campaign document "Agenda for American Renewal," President Bush describes the current banking system as an "incongruous relic" of the Depression era, and suggests that the nation has too many banks.
"The United States entered the 1980s with some 14,000 commercial banks and 4,600 savings and loans," he said. "In comparison, Canada had about 160 and Japan had under 100."
The paper acknowledges the "excesses" of the 1980s, in which "too many companies, too many financial institutions, and too many households took on too much debt."
And it also provides a brief defense of the savings and loan bailout and the rescue of the Bank Insurance Fund.