In Defense of GLB

Lest anyone think the Gramm-Leach-Bliley Act was a dud, Federal Reserve Chairman Alan Greenspan defended the 1999 law at the Chicago Fed's Conference on Bank Structure and Competition last week.

"My suspicion is, this is an act in progress," he said. "The full consequences of the act are going to be unfolding for a number of years."

Conversions to the reform law's new financial holding company structure have been relatively limited because executives want to see how oversight evolves, he said. And much of Gramm-Leach-Bliley's impact was immediate because it removed uneconomic barriers that complicated banks' entry into businesses such as securities underwriting, according to Mr. Greenspan.

"It is important to remember that Gramm-Leach-Bliley essentially stripped out a huge amount of excessive costs," he said.

Asked for his opinion on a federal insurance charter, Mr. Greenspan said he had not given much thought to calls for an alternative to state charters. But he did say that "having 50 separate legal systems" has "awesome" implications, such as companies' employing more lawyers than risk managers, and he indicated that a federal charter will eventually become reality. "The pressures to break down barriers … are really quite formidable and, frankly, irresistible."

Finally, Mr. Greenspan used his Q&A time to dispel any notion that his support for a tax cut is political.

After a lengthy explanation of the impact of federal surpluses, he insisted that he has never said that he supports President Bush's plan to cut taxes. "I just said that I think a tax cut is desirable, and I still do."

Many in the audience failed to see a distinction.

In a panel discussion after Mr. Greenspan's speech, Independent Community Bankers of America president Kenneth A. Guenther quipped, to much laughter: "I listened very carefully and tried to understand his remarks."

Shifting into his presentation, Mr. Guenther questioned "the slant, if not the bias, of the conference's agenda," which focused on how to limit the costs of the federal safety net.

As he extolled the virtue of higher deposit insurance coverage and the scourge of "too-big-to-fail" bailout policies, his microphone went dead. He labored on, trying to shout his remarks. The technical difficulty was fixed just as he was wrapping up his remarks.

That's a Laugh

Let no one say the Fed chief is humorless.

After raising concerns about how bankers typically grant credit too easily at the height of economic expansions, Mr. Greenspan said human nature is a powerful opponent of change because bankers are more interested in gaining market share than in maximizing profits.

"Market share competition essentially overrides profit competition," he said, joking that a banker on his way to bankruptcy court would still brag about stealing business from his rivals.

The 2d Time Around

A former deputy Treasury secretary, John E. Robson, who is President Bush's pick to head the Export-Import Bank, had a bit of a flashback Thursday during his easy confirmation hearing before the Senate Banking Committee.

"The first time I came before this committee was in connection with the S&L cleanup - this is a lot better," said Mr. Robson, who was appointed to his Treasury post by the first President Bush, as the hearing ended. His remarks prompted hearty chuckles from the panel's chairman, Phil Gramm of Texas, and ranking Democrat Paul S. Sarbanes of Maryland.

The committee is scheduled to vote Tuesday on Mr. Robson's confirmation, which would then go to the Senate for consideration.

Mr. Robson has been out of public life for nearly a decade and is now a senior adviser at the investment banking firm of Robertson Stephens in San Francisco.

>An Instant Gourmet

Coming to a restaurant near you … "little froufrou crusty things with tomatoes?"

OK, so maybe House Financial Services Committee Chairman Michael G. Oxley's description of his award-winning crostini with mushroom would not make a five-star menu, though perhaps the dish could.

Rep. Oxley, R-Ohio, told a luncheon gathering of Women in Housing and Finance last week that he won a cappuccino machine for his efforts in the annual Gourmet Gala in 1999. But before the impressed crowd started seeing him as some sort of Renaissance man, the chairman came clean.

Turns out his wife, Patricia Oxley, deserved all the praise.

"She picked out the recipe and made it," he confessed.

The most revealing part of the story, however, was the category in which the dish was entered: easy-to-prepare.

"She knows him well," one Oxley aide joked.

Though maybe he should be stripped of his cooking title, a crown he earned last week was all him.

He defeated Rep. Edward J. Markey of Massachusetts, a Democratic rival from his Commerce Committee days, for the annual free-throw championship in the House gym.

He prefaced his remarks to Women in Housing and Finance with a gratuitous, trash-talking slam worthy of a professional athlete.

"My good friend Ed Markey, who was totally humiliated by the free-throw contest …" Rep. Oxley began.

When word reached Rep. Markey, he replied through a spokesman: "I am the defending champion at 46 out of 50. He had never won before. Suddenly, he's destiny's child. He throws in 47 out of 50. Like him taking over the Banking Committee, it's such a preposterous improbability that I decided to let him have his day in the sun until next year."

CUNA Keeps 1 Exec

Carl Parks, senior vice president of governmental affairs at the Credit Union National Association, has been hired to be the top lobbyist for the National Association of Independent Insurers.

John McKechnie, previously vice president of legislative affairs, was promoted to succeed Mr. Parks at CUNA. Before accepting this promotion, Mr. McKechnie had been slated to leave for the National Credit Union Administration, where he would have been special assistant for congressional affairs to Chairman Dennis Dollar.

Lizarraga to Panama

Jaime E. Lizarraga, an aide on the House Financial Services Committee staff to ranking Democrat John J. LaFalce, has moved to Panama.

His last day on the job was May 4. He followed his wife, Kelly Lizarraga, whom the State Department has assigned to handle public relations for the U.S. embassy there. He has interviewed for jobs with the international trade finance or corporate finance departments of some U.S. financial services firms that operate in the country.

By Michele Heller, Nicole Duran, Jennifer Gordon, Barbara A. Rehm, and Dean Anason

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