To the Editor:

I was pleased to see the complete text of Eugene A. Ludwig's recent speech to the Exchequer Club in Washington ("Focus on Glass-Steagall Detracts from Bigger Modernization Issues," Jan. 31, page 4).

The comptroller of the currency's remarks stand as the most knowledgeable and informed set of concerns we have heard from the regulatory establishment regarding the real competitive issues facing the banking industry today. His words apparently reflect the time and effort Mr. Ludwig and his staff have devoted to understanding the sweeping and pervasive effects of the information technology revolution and its emerging impact on financial services.

Financial modernization is a sham unless it addresses the technological changes taking place in the design and delivery of financial services. The history of banking regulation suggests there will be one of two possible policy responses:

Continuing to fight yesterday's battles while the market decides the real winners and losers, or proposing legislation designed to minimize risk for banks and their customers while ignoring larger competitive issues.

We have seen this pattern before. Mr. Ludwig puts forth a more constructive plan that starts with education and analysis. As an industry, we would do well to support his approach.

David Van L. Taylor

Executive vice president

Bank Administration Institute

Chicago

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