A top Treasury official said he doesnot expect any comprehensive Congressional reform of the U.S.
banking industry until after the 1988 presidential election due
to political pressures and, to a lesser extent, the insider
trading scandal on Wall Street.
    George Gould, Under Secretary of the Treasury, told a Wall
Street Planning Group luncheon, "legislation is not going to
happen before the election ... (people) do not like to vote on
controversial issues in election years."
    "It may take a while in the next administration ... to get
something done," he added.
    Calls for a major overhaul of the U.S. banking industry,
which would probably feature wider investment banking powers
for commercial banks, has met strong opposition from private
interest groups, such as the Securities Industry Association.
    "These discussions have nothing to do with merit ... these
groups are trying to cloak self-interest in public policy
terms," Gould said. "It is easier to stop something than it is
to get it going."
    He also described current concern about insider trading as
"a major impediment to further progress ... it is not a helpful
backdrop to accomplish financial reform."
    Similarly, Gould said lobbying by such groups as the U.S.
League of Savings Institutions would probably mean that the
Reagan Administration's proposal for the recapitalization of
the Federal Savings and Loan Insurance Corp would be watered
down.
    Gould foresaw a five billion dlr injection over two years,
compared with the original request for 15 billion dlrs over
three years.
    Gould ruled out any new government initiative on banking
reform but said that some broad guidelines to address these
issues would be made public over the next few months.
 Reuter
