James L. Sexton, the Federal Deposit Insurance Corp.s director of supervision, celebrated his retirement at an agency party last week as colleagues and rival regulators traded good-natured jokes about the Texans tenure.
Office of Thrift Supervision Deputy Director Richard M. Riccobono recounted times when Mr. Sexton had used down-home homilies during discussions of difficult interagency proposals.
He would be discussing pig tails or something, and we would all sit there with serious looks on our faces thinking, What the hell is he talking about? Mr. Riccobono said at the party, which was attended by 150 current and former colleagues.
But he could also remember the time when Mr. Sexton took the fall for his proposal on raising capital for subprime loans.
All the agencies had talked about it, and we said, Go for it, Jim. Were right behind you, Mr. Riccobono said. We were all behind him until it died. When he turned around for support, we were all running for the woods.
As parting mementos, the OTS gave the 6-foot-7 regulator an oversize golf cap (which he promptly wore) and a six-pack cooler with the agencys logo on it.
FDIC associate supervision director Mark Schmidt offered a largely serious testimonial to his boss, but said, I think the burning question is, why does the OTS have six-pack coolers with their logo on it?
Mr. Sextons last day was Saturday. Deputy division director Michael J. Zamorski, the agencys point man on the year-2000 computer problem, is serving as acting director.
As one of his final acts, Mr. Sexton appointed Sandra L. Thompson as assistant director for electronic banking. Mr. Sexton said the new position within the division of supervision will focus primarily on security issues and bank outsourcing relationships. Ms. Thompson, who started Sept. 18, was previously the FDICs program manager for year-2000 event management initiatives.
Senate Banking Committee Chairman Phil Gramm made it clear last week that the fat lady has not sung yet on a Securities and Exchange Commission proposal that would bar banks and other companies from using the same firm as auditors and consultants.Speaking at a subcommittee hearing Thursday on auditor independence, the Texas Republican, who opposes the plan, said he was unpersuaded by arguments that four of the five top auditing firms have already made plans to separate their consulting businesses.
Thats like me saying I dont care if we tax opera, because I dont go to the opera, he said. The fact that they decided to change their business, and now they think it is good to make everybody do it that doesnt overwhelm me.
Sen. Gramm praised SEC Chairman Arthur Levitts sincerity on the issue, but said, Often when he is wrong, he is confident he is right.
What will Federal Reserve Chairman Alan Greenspan and the next Presidents Council of Economic Advisors chairman have in common if Rep. John LaFalce, D-N.Y., controls the House Banking Committee next year?Regular treks up Capitol Hill to tell legislators how the American people and economy are doing.
Just as the Fed chairman is required to report to Congress twice a year on the economic condition of the nation, Rep. LaFalce would ask the chairman of the Council of Economic Advisors to report to Congress on the human impact of the economy.
We need to go beyond looking at simply deficits or GNP or productivity growth rates, Rep. LaFalce said in a recent interview.
Rep. LaFalce said he would want answers to such questions as: How long, for example, are people working today? and How much debt does a student incur going to college?
The private-sector group created last April to help federal regulators increase market discipline on banks and brokers is on target to deliver its report by yearend, its chairman, Walter V. Shipley, said last week.Mr. Shipley, the former chairman and chief executive of Chase Manhattan Corp., refused to detail the panels work to date, but he said the group of chief financial officers from six large banks, three foreign banks, and three securities firms is making progress.
The panels recommendations will be ready for financial services firms to use in preparing their reports on 2000 performance, which should come out in February, he said.
Mr. Shipley reiterated his opinion that before any new corporate disclosures are endorsed, they should pass a usefulness test, meaning the information must truly help the market better understand a companys risk exposures or internal operations.
While the groups conclusions will not be binding, they could, if adopted, head off future rules from agencies determined to keep closer tabs on complex companies.
The pre-election exodus from Capitol Hill continues.Charles Schwab & Co. has hired House Banking Committee staffer Laurie S. Schaffer as a senior corporate counsel. Her job is to help the San Francisco company take full advantage of the powers granted by the Gramm-Leach-Bliley Act. Her principal duties will include handling issues related to merchant banking rules and permissible investments, as well as monitoring banking legislation.
The marriage makes sense. Schwab was the first nonbank financial services firm to acquire a bank, U.S. Trust, after Gramm-Leach-Bliley was enacted last year, and Ms. Schaffer, who was one of the key lieutenants of House Banking Chairman Jim Leach, helped write the historic law.
Forget the new dollar coin; what about using pink pineapples to make purchases?During a Sept. 19 House Banking subcommittee hearing on furthering e-payment devices, Thomas P. Vartanian, head of the electronic commerce group of the law firm of Fried, Frank, Harris, Shriver & Jacobson, said that any payment source could work well, as long as consumers believed in it.
Green dollars could as easily be pink pineapples, as long as people trusted the underlying value of those pineapples, said Mr. Vartanian, who works out of the firms Washington office.