Gonzalez Sets Hearings to Gauge Adequacy of Bank Fund Recap
WASHINGTON -- The legislation to recapitalize the Bank Insurance Fund has not yet been forwarded to the President's desk, but chairman of the House Banking Committee has already scheduled hearings on the adequacy of the funding.
Chairman Henry B. Gonzalez has not given up hope for a more comprehensive banking bill in 1992, and there are indications the White House will back the effort. The Texas Democrat said he will hold extensive hearings next year on interstate branching and other proposals that failed this year.
At a banking panel hearing next Wednesday, Comptroller General Charles A. Bowsher, head of the General Accounting Office, will be asked to explain his warning last week that the $70 billion provided in the 1991 bill may not be enough. Mr. Bowsher also said bank accounting methods are still too weak.
"If members of the House and Senate banking committees had known that FDIC required a larger loan from the U.S. Treasury than $70 billion," Rep. Gonzalez said, "I have no doubt that the conferees would have worked to include these changes."
White House to Try Again
Meanwhile, Michael Boskin, chairman of the President's Council of Economic Advisers, said the administration will try again next year to pass legislation overhauling the financial services industry.
"We will come back and make another attempt to pass important aspects of banking reform that will make our banks not only safer and sounder but much more internationally competitive," he told the American Enterprise Institute.
Rep. Gonzalez's 1992 hearings will focus on interstate branching, securities powers, the consequences of permitting nonfinancial firms to buy banks, and the impact of bank mergers on communities. Rep. Gonzalez said he may propose legislation after the hearings. But he expressed skepticism about the administration's claim that the banking industry would benefit from interstate branching and repeal of Glass-Steagall.
|Pie in the Sky'?
"Since the administration never produced any satisfactory proof to support its contentions, I sometimes wonder if it is all just pie in the sky," he said.
Rep. Gonzalez said he plans to focus on the Federal Reserve's policy of granting limited securities powers to some banks under section 20 of the Glass-Steagall Act.
The first major piece of legislation the committee is expected to take up will be funding for the Resolution Trust Corp. A stopgap funding package, passed on the last day of the 1991 congressional session, provided funding through April 1, but more money will be needed after that.
Mr. Gonzalez warned that any future banking legislation considered by the committee would "include a quid pro quo for the little guy," though he was not more specific.