WASHINGTON — A House committee has recommended sweeping changes in the nation's banking laws, criticizing present laws that bar banks from the securities business and other industries as anti-competitive and potentially dangerous to their financial soundness.
The House Government Operations Committee, in a report adopted Tuesday and released Friday, recommended changes that would allow federally insured banks and thrift institutions to operate as part of corporations that also own securities or non-bank financial firms.
The report did not propose specific legislation but comes as Congress prepares to debate bills revising federal banking laws.
The committee stated that the 1933 Glass-Steagall Act, which separates commercial and investment banking, and the Bank Holding Company Act, which prohibits affiliations between banks and other types of businesses acting in combination with each other, "severely impair the mobility of corporate capital invested in the commercial banking industry.
"These legal barriers to the redeployment of corporate capital by banking firms, which have no counterpart in other industries, have serious adverse consequences for the financial soundness of banks and the efficiency and competitiveness of the entire U.S. financial sector," the report stated.