True nationwide banking could become an early reality - helping bank stocks - if Gov. Bill Clinton were elected President.

But the tradeoff, analysts said, might be a strengthened Community Reinvestment Act, with bankers obliged to step up urban-renewal financing. That would be less likely if President Bush returns for a second term.

Bradford M. Johnson, a banking analyst in Atlanta for Sterne, Agee & Leach Inc., said nationwide banking legislation could be enacted before the end of 1993 if the Arkansas governor is elected. He thinks the absence of U.S. institutions from the ranks of the world's largest banks could spur action under a Democratic administration headed by Mr. Clinton.

Source of Stock Profits

"It may be dangerous to be sticking our neck out this far this early, but extraordinary profits in the stock market do, after all, come from thinking ahead - and being right," Mr. Johnson said.

Frank J. Barkocy, an analyst in New York for Advest Inc., agreed that a Clinton victory, coupled with retention of Democratic majorities in Congress, "could speed up the timetable for nationwide banking."

A Bush triumph would mean continuity in leadership at bank regulatory agencies but no improvement in strained presidential relations with Congress.

Moreover, noted Fred W. DeBussey of Fitch Investors Service Inc., the President does not seem inclined "to accommodate major banking initiatives."

But President Bush could, as he has been asserting recently, focus his second term on domestic economic issues. While this might not offer near-term benefits for banks specifically, it could be positive for them later on.

The problem for both candidates, Mr. DeBussey noted, is that "the savings and loan bailout continues to cause banking legislation inertia in Washington."

Among other things, he said, record turnover in Congress may open many prized committee slots and cause senior banking panel members to seek more rewarding assignments, leaving those committees with less influence.

But Mr. Clinton's economic advisers would likely focus on the U.S. position versus other nations in developing a plan to spur growth and competitiveness, Mr. Johnson said. In doing so, they could hardly overlook the relative decline of this nation's banks.

The largest U.S. banking company, Citicorp, ranked only 23d in the world in assets at yearend, according to American Banker.

Mr. Johnson said he believes that fact means a Clinton administration would begin with "a strong presumption in favor of further bank consolidation and liberalized geographic restrictions."

True nationwide banking would mean banks could branch across state lines and acquire banking companies in other states.

The "high-probability targets in an environment of true nationwide banking" would be banks with dominant positions in growing markets, Mr. Johnson said. Barnett Banks Inc., Florida's largest banking company, is a prime example, he said.

Other companies that are the last large-entry vehicles in their states for acquirers would immediately become big targets. Fourth Financial Corp., Wichita, Kan., is a "less obvious example," Mr. Johnson said.

Others are less sanguine, however. Democrats running both the White House and Congress "could give the appearance of harmony on the Potomac," said Mr. Debussey. "However, given Mr. Clinton's apparent absence of strong feelings about banking, there is little expectation for significant legislative changes."

Moreover, Mr. DeBussey said, "the voices of community bankers may well be recognized more quickly in a Clinton White House."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.