WASHINGTON -- A campaign launched this week by the Securities Industry Association has escalated the long-running battle over granting securities powers to banks.

The Wall Street trade group invited its more than 600 members to collect evidence of "tying" abuses - in which banks make a loan or credit enhancement only if they also get underwriting business. The allegations relate chiefly to letters of credit that may be tied to bond underwritings.

Anonymity Promised to Accusers

The trade group said it would pass along details of alleged violations to banking regulators without identifying the securities firms providing the information.

Austin Koenen of Morgan Stanley & Co., chairman of the trade group's investment banking committee, said tying offers banks "enormous competitive advantages" over investment banking firms.

He said banks can fund their operations with federally insured deposits and "can threaten an issuer's traditional source of credit."

Tying complaints go back many years, but the issue heated up recently when a Securities and Exchange commissioner, Richard Roberts, began speaking out about tying complaints he had received.

Mr. Roberts forwarded the allegations to the Office of the Comptroller of the Currency, which has confirmed that an inquiry is under way.

Meanwhile, Federal Reserve Chairman Alan Greenspan last month told Rep. John Dingell, chairman of the House Energy and Commerce Committee, that a Fed staff inquiry "is in its initial stages."

Rep. Dingell, D-Mich., is expected to pursue the tying issue next year in hearings and perhaps with legislation.

SEC Chairman Richard Breeden told Rep. Dingell recently that "current law does not give the SEC the means to police bank tying arrangements, but it does give the banking regulators authority to address such abuses."

The Securities Industry Association sought help for its cause in a letter to members signed by Mr. Koenen. To make tying allegations stick, the association said, specific details are needed, as well as statements from debt issuers that they were coerced by banks into going along with a tying arrangement.

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