WASHINGTON -- The Federal Reserve Board is exceeding its statutory authority by requiring bank holding companies to pump up ailing bank subsidiaries, a lawyer for MCorp Financial Inc. told the Supreme Court yesterday.

Arguing in the second case formally reviewed by the justices on opening day of the court's 1991-1992 term, Alan B. Miller, a partner in Weil, Gotshal & Manges of New York City, said there is no federal law that allows the Fed to impose the requirement, known informally as the agency's "source of strength" regulation.

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