The American Banker's opinion pages in recent weeks have seen pros and cons from Steven Roberts, Ronnie Phillips, Robert Dugger, Carl Felsenfeld, and William Isaac on the question of consolidating the financial regulatory agencies.

* The widespread interest in the notion of a "superregulator," and the useful contributions of these thinkers and many others, are readily apparent. But the public interest will not be a top priority in the way this issue is decided.

A greater factor will be the turf battle unfolding among the Treasury, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Federal Reserve Board, and the various state agencies regulating financial institutions.

Misplaced Priorities

A high priority will be attempts by Treasury and the Comptroller's office to shape a replacement for the existing regulatory structure that would look good on paper without being impervious to political pressures.

A high priority will be to yield to the grudges held by the respective chairmen of the House and Senate banking committees toward certain institutions or persons who failed to anticipate their emergence into positions of power.

A high priority will be to forge a compromise that continues to provide de facto 100% deposit insurance coverage for the 38 largest banks without disturbing their "most favored" status.

A high priority will be to mollify banks under $1 billion of assets by reducing their regulatory burden without adjusting a fee system that imposes disproportionate examination, supervisory, and insurance-coverage costs on the smaller institutions.

Good Reasons to Wait

It might be wise to put off the discussion until the Senate Banking Committee installs a new chairman after Sen. Donald Riegle retires, and until the House chairman, Rep. Henry Gonzalez, takes a somewhat less strident and vengeful approach to this issue.

And it might be wise to wait for the presidential election year when the administration may be less eager to be dealing with such a high-profile issue.

To ignore such concerns would certainly trigger a fire sale of a substantial number of the smaller financial institutions, accelerating the already alarming pace of industry disintegration.

No Public Discussion

Thus far, there has been no indepth public discussion of the regulatory proposal. The administration has not demonstrated skills in the management of this area that would merit trust or confidence.

Inside the Beltway, where the so-called compromise is being shaped, the stakes are very high and the players are very powerful.

Outside the capital, where the vast majority of Americans live, the stakes are even higher, but at this point there is little evidence of any consideration being given to the public interest.

That should be the highest priority of all, but the people lost in the little world inside the Beltway would have a problem understanding that.

Mr. McCrady heads McCrady/Midwest, a business and trade consulting firm. He was executive vice president of the Independent Bankers of Minnesota.

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