Brushing aside losses caused by recent turmoil in global markets, Merrill Lynch & Co. chairman and chief executive David H. Komansky on Wednesday said the giant securities firm would continue to invest aggressively in Europe, Japan, and Asia.

"Nothing that has occurred in the past several weeks has shaken our confidence in the fundamental strength and resilience of this world view," Mr. Komansky said in a speech to the National Press Club. "Have no doubts: Merrill Lynch is still very bullish on America, and we are just as bullish on the world."

Mr. Komansky also used his trip here to push for enactment of financial services reform legislation.

"If we don't reform our banking laws, there will be a price to pay in American economic leadership," he said. "The world's financial system is now being reordered for the next 25 years. Our choice is to lead, follow, or get out of the way."

Before and after his speech Mr. Komansky met with key lawmakers, including Senate Majority Leader Trent Lott and Minority Leader Thomas Daschle. Problems in financial systems around the world, Mr. Komansky said, underscore the need for change here. Mr. Komansky said the legislation, if enacted, would result in stable, diversified institutions that mix banking, insurance, and securities products.

Failure to reform U.S. laws this year would pose "a clear and present danger" for the nation's long-term global competitiveness, he warned.

Though Mr. Komansky said warring industry groups had reached an "extraordinary consensus" on the contents of the bill, he acknowledged that the Clinton administration's veto threat remained a major obstacle.

As if on cue, Treasury Secretary Robert E. Rubin issued a statement Wednesday saying the administration remained in "strong opposition" to the bill and that only "significant changes" would prevent a presidential veto.

Primarily, the administration has opposed the bill because it would not grant direct operating subsidiaries of national banks full financial powers. But Senate Republican efforts to eliminate any new Community Reinvestment Act-related provisions have widened the administration's opposition and led the Senate Banking Committee to postpone a vote on the bill last week.

"Any efforts to undercut CRA, as well as any proposals that would provide the opportunity for depository institutions to evade CRA responsibilities, would be unacceptable," Mr. Rubin said.

Despite the Treasury's opposition, Mr. Komansky said that he was "quite optimistic" the bill will be enacted. He told reporters before his speech that he was hopeful Senate Banking Chairman Alfonse M. D'Amato would hold a committee vote Thursday or Friday, but a committee spokesman said yesterday afternoon that none was scheduled.

If reform legislation fails, Mr. Komansky predicted during a question- and-answer session that Merrill Lynch's performance and high stock price would keep it safe from a hostile takeover by a commercial bank.

Yet in his speech he warned that 23 securities firms had been acquired by commercial banks in the past 18 months, including nine by foreign banks. He primarily blamed unfair, outdated laws that give U.S. banks the right to buy securities firms but bar the reverse.

Mr. Komanksy added that Merrill Lynch would be interested in expanding into the banking industry if presented with the right opportunity. In an interview after his speech, he said Merrill Lynch is only interested in pursuing niches such as trust services and transaction processing.

Despite his optimism about the international economy, Mr. Komansky said that the stock prices will remain volatile in the short term and that the markets "have not yet reached bottom." Major reforms in the Japanese and Russian economies are necessary to ease the world financial crisis, he said.

However, he emphasized that the global picture for the 21st century was bright because of the spread of democratic governments and market-oriented economies as well as the Internet and other new technologies.

Merrill Lynch announced Tuesday that emerging market losses reached $135 million in July and August. As a result, third-quarter net income is expected to fall to $102 million, the firm said.

When asked if Merrill Lynch expected further losses, Mr. Komansky said that the company's third-quarter performance will turn on its September results. "The story is still not fully told, but we are extremely hopeful."

He sidestepped a question about possible layoffs or reductions in employee bonuses, saying that compensation would be based on profitability and return on equity.

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