The Federal Reserve Board's Richard A. Small did his best David Letterman imitation last week.

Speaking at a money laundering conference here last week, the Fed's assistant director of banking supervision and regulation gave his Top 10 reasons why the so-called "know-your-customer rules" are taking so long. Among the crowd-pleasers were:

"I work for the government; I don't have to do it."

"The regulation actually is done, but it's not year-2000 compliant."

"I can't get the White House coffee video team to commit to doing my training video."

NationsBank Corp. president Kenneth D. Lewis was asked after a speech here last week about an Oct. 31 meeting of the bankers who advise the Federal Reserve Board.

American Banker reported last week that the bankers hammered Fed Chairman Alan Greenspan for insisting that banks should be forced to offer new products through holding company subsidiaries. Mr. Greenspan has argued that to allow banks to directly underwrite securities or insurance would give them an unfair advantage because the government subsidizes banks through deposit insurance and the discount window.

Needless to say, the bankers do not agree.

"I'm a member of the Federal Advisory Council, so I was at that meeting," Mr. Lewis said. "That kind of constrains me because we attempt to have all of that conversation private, but let me just say I do not think there is a net subsidy to banks and leave it at that."

On another controversial public policy question, Mr. Lewis was asked if he backed privatization of deposit insurance.

"We could handle that for less regulation," he said.

Finally, on the battle between banks and credit unions, Mr. Lewis said NationsBank could start a tax-exempt credit union and provide low-cost financial services to its 100,000 employees.

"Probably because of who we are we won't do that," he said. But it would be a "distinct employee benefit."

Mr. Lewis predicted that neither Congress nor the regulators would make any major changes to banking laws or rules in the next year. u

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