Although more than 100 banks manage and sell their own mutual funds, federal law forbids them to "sponsor" the funds. That means banks must find an outside company to organize, register, capitalize, and promote their proprietary mutual funds.
Richard Kovacevich, president and chief executive of Norwest Corp., wants the rules changed to allow banks to participate fully in the mutual funds business. He made his case in a speech to the Federal Home Loan Bank of Seattle's annual management conference. Excerpts follow.