Comptroller of the Currency Eugene A. Ludwig announced recently a new rule governing operating subsidiaries of national banks. The rule provides that a national bank may establish a subsidiary to conduct any activity permissible to the bank or deemed by the comptroller to be "incidental to banking."

Banks will now have greater freedom to expand through either holding company affiliates or direct bank subsidiaries. Some banks may choose to do away with their holding companies, simplifying their organizations and reducing costs.

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