The Glass-Steagall Act separatingbanking and securities activities in the U.S. is all but dead
following decisions by federal and state authorities, the
chairman of Bankers Trust Co asserted.
    "There are plainly nails in the coffin of Glass-Steagall,"
Alfred Brittain said in remarks prepared for delivery to a
meeting of bank and financial analysts.
    He noted the Federal Reserve Board is due to decide Bankers
Trust's application for a subsidiary that can underwrite
certain securities.
    Brittain said New York State bank regulators have welcomed
applications for affiliates of New York-chartered banks which
could underwrite corporate securities. And he said a U.S. Court
of Appeals upheld Bankers Trust's commercial paper business.
    He said eventually the financial services industry will see
fewer but bigger companies drawn from the ranks of the present
commercial banks, investment banks and conglomerates.
    On another topic, Britain called for a redefinition of the
role of the Federal Deposit Insurance Corporation.
    "I think we should return to the original purpose of FDIC
insurance -- to protect small despositors and not depository
institutions themselves," Brittain said.
    He suggested banks be permitted to offer both insured
deposits and uninsured deposits. High quality assets would be
segregated to back up insured deposits.
    He said big banks could then fail without draining the
insurance funds. "Stockholders could be wiped out, management
rmemoved and uninsured creditors could take their fair share of
any losses," he said. But insured deposits under 100,000 dlrs
would be protected.
 Reuter
