Foreign Banks' Spokesman Inherits Battle on Powers
NEW YORK -- Banks need to be in the securities business to survive, says the new head of the Institute of International Bankers.
"We believe the |universal' approach to banking is the best one, since it permits banks to diversify their earnings," said Pierre de Weck.
He was elected this month as chairman of the institute, which represents foreign banks in the United States.
He is also executive vice president of Union Bank of Switzerland, overseeing the bank's North American operations.
Mr. de Weck, 40, has taken over as the institute battles a proposal in Congress that would require foreign banks to set up U.S. holding companies if they want to use new banking powers such as securities underwriting.
Greenspan Opposes Measure
The proposal is opposed by foreign banks, since it would force them to capitalize their U.S. operations separately.
The foreign banks have the support of Fed Chairman Alan Greenspan, who warned this month that foreign regulators might retaliate, forcing U.S. banks abroad to set up similar holding companies.
Mr. Greenspan also warned that approval of the proposals could cause some foreign banks to pull out of the U.S. market.
"We support the basic aims of the Treasury [to reform U.S. banking]," said Mr. de Weck, who is based in New York.
"But setting up U.S. holding companies would not be an efficient use of capital on a worldwide basis and would limit the activities of international banks operating the U.S."
Mr. de Weck has particular reason to be concerned about the proposal. His own bank, one of the 16 foreign institutions allowed to keep commercial as well as investment banking powers under the International Banking Act of 1978, stands to lose extensive U.S. investment banking operations that Mr. de Weck has built up over the last few years.
A Fast-Track Career
The Swiss banker's election as chairman of the institute caps a rapid rise in his career.
A graduate of the Swiss Federal Institute of Technology with a degree in nuclear engineering, Mr. de Weck switched careers after deciding there was little future in nuclear power plants.
In 1976, he graduated from the Sloan School of Management at Massachusetts Institute of Technology and then spent eight years with Citicorp, first in Zurich and then in New York.
Concerned about losing touch with Switzerland, he joined Union Bank in Zurich in 1985. In 1987, he was named general manager of the bank's New York branch and in 1989 head of all of Union's operations in North America.
PHOTO : Pierre de Weck Opposes holding-company plan