Europe's Top Banking Aide Heads to D.C. for Lobbying
LONDON -- The European Community's top banking official is in Washington this week to appeal for expanded powers in the American banking market for the community's banks.
Leon Brittan, the community's commissioner for financial services and competition, left Brussels last Friday for the five-day tour, with meetings planned with Federal Reserve Board Chairman Alan Greenspan, Securities and Exchange Commission Chairman Richard Breeden, and key members of Congress.
He is also slated to discuss the Bank of Credit and Commerce International scandal with top U.S. investigators, according to E.C. officials.
Worries About Bill
Mr. Brittan said he was concerned that certain provisions in the U.S. Treasury's banking reform bill would limit the ability of European banks to compete on a level playing field with their American counterparts.
"I have been pointing out for a couple of years that we here in the European Community have a more open system," he said, before leaving Brussels. The community is "naturally seeking to commend that" to the United States.
The community's Second Banking Directive, adopted in December 1989, grants a "passport" to foreign banks to operate throughout the 12-nation community provided they are licensed in just one E.C. country. The directive takes effect on Jan. 1, 1993, the date the community's internal single market of 340 million people officially opens.
Provision Is Dropped
Legislation pending before both the House and Senate Banking Committees has now dropped a requirement that foreign banks must establish separate subsidiaries in the United States. That provision was strongly opposed by the commuity because of concerns that lending activities of European banks operating in America could be severely restricted if capital of the foreign-based parent could not be used to back U.S. loans.
Mr. Brittan is still concerned, however, about elements in the Senate version that would allow the Federal Reserve Board to selectively order such separate capitalization. In addition, the Senate version allows the Fed to review the whole issue after a year, which could force E.C. banks to completely change their game plans after an expensive launch in the United States, E.C. officials contend.
The community is also still worried that U.S. legislation could limit the ability of foreign banks to branch across state lines.
Antitrust Agreement Approved
While in the United States, Mr. Brittan is scheduled to sign a U.S.-European antitrust agreement, which pledges mutual cooperation in policing anticompetitive activity.
Since last September, when a landmark new mergers law took effect the community has been involved in several mergers that include large American corporations.