July 16, 1990
TO: BOARD OF GOVERNORS NO. 49-90
RE: INSTITUTE TESTIMONY ON FINANCIAL SERVICES RESTRUCTURING
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On July 11, the Institute testified at a hearing before the
Telecommunications and Finance Subcommittee of the House Energy &
Commerce Committee on financial services restructuring. The
Institute's testimony set forth its affirmative legislative
proposal, approved by the Board in January, which was first
presented to the Senate Banking Committee in April. (See
Memorandum to Board of Governors No. 32-90, dated April 30,
1990.) As in the April testimony, the Institute stressed four
aspects of its proposal: (1) a "two-way street" that would allow
banks and securities firms to offer all types of financial
services, (2) protection of the federal deposit insurance system
through a combination of firewalls and certain restrictions on
firms, (3) functional regulation, and (4) special mutual fund
firewalls.
The Institute's testimony also attacked the OCC common
trust fund proposal. The Institute state that, if adopted, the
Investment Company Institute v. Camp and, at the same time,
contain none of the safeguards provided for in congressional
proposals for financial services restructuring.
At the hearing, Chairman Markey expressed concern over the
OCC proposal and announced that he intended to hold hearings on
it after the August recess.
Copies of the Institute's written and oral testimony are
attached.
Craig S. Tyle
Associate General Counsel
Attachments