House Banking Committee Chairman Jim Leach abandoned his arduous effort last week to pass a sweeping financial reform bill. He had worked doggedly to pass a bill that would have repealed the Glass-Steagall Act's barriers between commercial banks and securities firms and eased bank regulation.

But much of the industry had complaints about his plan and when restrictions on insurance sales were added, most banks lined up against the Iowa Republican.

The yearlong battle appears to have left some clear winners and losers in its wake. The American Banker's Bill McConnell and Barbara A. Rehm tote up both sides of the scorecard:


Alfonse M. D'Amato - The Senate Banking Committee chairman largely ignored banking during the past year, but the failure of Rep. Leach's plan sets up the New York Republican as the chief arbiter of financial modernization. Bank and securities firms favor Sen. D'Amato's 1995 Glass- Steagall repeal plan.

Eugene A. Ludwig - The Comptroller of the Currency will remain the industry's ally when it comes to new powers. Mr. Ludwig can keep on keeping on after thwarting attempts to rein in his authority to grant new insurance powers to banks.

Banks - Recognizing they can get the new powers they want from the comptroller and the courts, the industry may have won a game of chicken with Rep. Leach. Banks will very likely see their insurance and securities powers expanded and won't have to accept any limitations on their favorite regulator.

Rep. Joseph P. Kennedy 3d - The Democrats' chief guardian of the Community Reinvestment Act can rest a little easier. Rep. Kennedy forced Rep. Leach to back away from most CRA-weakening provisions in the regulatory relief package. The Massachusetts Democrat is also glad to see the Glass-Steagall legislation die. He had worried that banks would have moved assets now subject to CRA rules to new uninsured wholesale financial institutions.

Federal judges - Without new rules making bank insurance sales the domain of state regulators, U.S. judges will continue to be the key mediators of disputes over bank powers.


Rep. Jim Leach - The House Banking Committee chairman exhausted his staff and an army of lobbyists in his battle to enact sweeping financial reform - all for nothing.

The Iowa Republican revised his bill repeatedly, searching vainly for the right combination of provisions. But it was not to be. Rep. Leach has privately said his chairmanship, maybe even his seat, was riding on this legislation.

Alan Greenspan - At every turn, he was right there supporting Rep. Leach. With the bill's demise, Mr. Greenspan lost a chance to rule the regulatory world. The legislation would have required new securities and insurance activities occur in holding company subsidiaries, thus expanding the Fed's empire.

Insurance Agents - The Independent Insurance Agents of America could have used Rep. Leach's bill to protect their members from competition. They had pushed to incorporate a five-year moratorium on the Comptroller's Office expanding bank insurance powers. Now they're at the mercy of the comptroller.

Bankers Roundtable - Did the big-bank trade group ever really support Rep. Leach's bill? Hard to tell. Whatever the case, the group's public waffling and persistent promises to take a position made the Roundtable look spineless.

State Insurance Commissions - The bill's final version would have required the comptroller to consider the opinions of state insurance regulators when evaluating whether a product is insurance or a financial instrument.

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