WASHINGTON - More than a half dozen chief executives from some of the country's largest banks, securities houses, and insurance companies are poised to unveil as early as this week a trade group to represent the financial services industry on public policy issues.
Born of an alliance formed during the battle to win passage of financial modernization, the new organization is distinctive in that it counts among its founding members some of the most powerful industry executives in the country.
Philip J. Purcell, chairman and chief executive officer of Morgan Stanley Dean Witter & Co., is the group's point man, according to industry sources. The organization - which is expected to christen itself the Financial Services Forum - would be an invitation-only roundtable of CEOs focusing on legislation and rules concerning privacy, electronic commerce, taxes, and trade.
Sanford I. Weill of Citigroup Inc., David H. Komansky of Merrill Lynch & Co., and John B. McCoy of Bank One Corp. are among the founding members, sources said. Others reportedly include the chiefs of American Express Co., Chase Manhattan Corp., Household International Inc., J.P. Morgan & Co., and Prudential Insurance Company of America.
Officials of these companies, who have held at least two organizational meetings since August, want to expand to between 20 and 25 members. They would recruit from among the biggest players ranked by market capitalization and assets, such as Bank of America Corp., First Union Corp., and American International Group.
Participants have reportedly agreed to invest $200,000 each to start the group and are searching for a high-profile director. A spokesman said Mr. Purcell was not ready to comment publicly.
The effort reflects the steady convergence of financial industries that is expected to gain momentum under the recently enacted financial reform law. Many of these executives led the charge on Capitol Hill for the law, which repealed decades-old prohibitions on bank mergers with securities or insurance companies. Sources said the group coalesced in part from the relationships these executives built while lobbying Congress and from the increased mutual interests that resulted from their victory.
Other groups are trying to broaden their memberships to position themselves for the future but have met limited success so far.
The Bankers Roundtable renamed itself the Financial Services Roundtable this year and opened its membership to insurance and securities companies. Denying suggestions that the Roundtable is striking out, president Steve Bartlett said "significant interest" has arisen and his group is "on schedule" to sign up its first nonbank members by mid-February.
Acknowledging the overlap, Mr. Bartlett said he is not worried about losing his largest members to the new group. In fact, he said, the Roundtable recently lured back Citigroup, which had quit it in June. He persuaded the New York banking company to rejoin his group's technology arm, the Banking Industry Technology Secretariat, Mr. Bartlett said.
The American Bankers Association and America's Community Bankers explored a merger this summer, but the deal collapsed in September over who would control the board and management and because many thrift executives and state trade group officials balked.
Many members in the group being organized by Mr. Purcell belonged to the Financial Services Council, which is expected to disband by early next year. But the council was focused solely on financial reform; the new group will take a broader view. Unlike the council, which comprised lobbyists, the new group's members will be chief executives only.