Comptroller-in-waiting John D. Hawke Jr. cannot understand why so many people are afraid to let national banks conduct new businesses in operating subsidiaries.

"The op-sub issue has been blown out of proportion," the Treasury Department's under secretary for domestic finance said in an interview last week.

Financial reform legislation pending in Congress would require national banks to subtract any investment in an operating subsidiary from their capital. That ensures any losses suffered by the subsidiary would not affect the bank's safety.

In addition, Mr. Hawke said, requiring banks to dip into capital to fund operating subsidiaries would limit their use.

"People have not focused on the effects of the capital haircut," he said. Most banks, he predicted, would continue to use bank holding company subsidiaries.

"We've done an analysis that shows, with one or two minor exceptions, no national bank could acquire any of the 50 largest insurance companies as an operating subsidiary," Mr. Hawke said. "Fear that holding companies are going to disappear are not grounded in fact."

Treasury and the Federal Reserve have been at loggerheads for months over legislation that would require new bank powers to be housed in holding company subsidiaries. The bill would allow banks, insurance companies, and securities firms to combine.

The Fed, with oversight over holding companies, supports the bill by arguing it is a safer and fairer way for banks to enter new businesses.

Treasury opposes the legislation, saying banks ought to have a choice in how they structure their operations. An arm of Treasury, the Office of the Comptroller of the Currency, regulates national banks.

Last month, President Clinton nominated Mr. Hawke to succeed Eugene A. Ludwig as comptroller. The Senate Banking Committee is expected to hold a confirmation hearing on the nomination next month.

Big-I lobbyist Paul Equale got a big promotion last week.

The Independent Insurance Agents of America named Mr. Equale chief executive officer-a job he will share with Jeff Yates.

Mr. Equale had been a senior vice president with the insurance agents, and Mr. Yates held the top staff job as executive vice president and general counsel.

The two men will share the top job, with Mr. Equale administrating the association's activities and programs, and Mr. Yates handling industry affairs, state relations, education, and the Best Practices program, according to a release.

Mr. Equale said he will lead new ventures, too, such as the trade group's plan to buy a thrift. The agents have narrowed their options down to a handful of institutions, he said.

Though Bob Rusbuldt moves up to become the group's top lobbyist with the title of executive vice president, Mr. Equale said he will continue to talk to lawmakers.

"I love to lobby," Mr. Equale said. "Don't let my friends in the banking industry think I am putting down my government relations portfolio."

The Exchequer Club has new officers, and for the first time all three financial services industries are represented.

From banking are chancellor Rich Whiting of the Bankers Roundtable; vice chancellor Beth Climo from the American Bankers Association; and recorder Steve Verdier from America's Community Bankers. The club's bursar is Gary Hughes of the American Council of Life Insurance. Marc Lackritz of the Securities Industry Association is director at large, which means it's his job to find someone willing to pay for the reception that precedes the club's monthly luncheons.

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