It is ironic that on the day the Clinton administration proposed to repeal the Glass-Steagall Act, the Barings PLC investment bank failed, due to derivatives trading. Could this be an ominous warning? Maybe.

Because of proprietary risk and the risk that new bank activities pose to the bank's capital and to the FDIC fund, congressional debate is most likely to focus on how new nonbank activities are regulated rather than on which activities are permissible. Now is the time for Congress to define closely who, how, and what should be regulated that has an affiliation with a commercial bank or savings and loan association.

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