The Federal Reserve has approved Mellon Bank Corp.'s application to underwrite and deal in corporate debt and equity and expand its securities activities.

The Pittsburgh banking company established a securities subsidiary, Mellon Financial Markets Inc., in 1995, when it received "tier 1" powers to underwrite certain bank-ineligible debt. These include municipal revenue bonds, commercial paper, and certain asset-backed and mortgage-related securities.

The approval means that only five of the 26 U.S. section 20 subsidiaries lack the expanded authorization. Nineteen foreign banks have these subsidiaries, most with debt or equity underwriting powers.

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