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Panel to Meet on Bank Mergers

April 17, 1998|From Reuters

House Banking Committee Chairman James Leach (R-Iowa) said Thursday that his panel will hold hearings later this month on the recently announced bank mergers.

"The case for greater competition and homogenization within the financial services industry--banking, securities and insurance--may be compelling, but the precept that banks should be intertwined with general commercial companies demands great scrutiny," Leach said.

The lawmaker's comments came a week after Citicorp and Travelers Group Inc. announced plans for their historic $70-billion merger, creating one financial conglomerate that would offer insurance, securities and banking services, in defiance of the nation's Depression-era banking laws.

Also Thursday, Federal Reserve Gov. Laurence H. Meyer urged Congress to overhaul those same laws, saying that technology and globalization will deregulate the financial services business whether or not Congress acts.

Meyer spoke approvingly of the recent wave of mergers, predicting that the collapse of geographic barriers would lead to the creation of the first national banking system in the United States within a few years.

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