Chase to Ask Fed for Securities Powers If Current Congress Doesn't Change Law
HONOLULU -- Chase Manhattan Corp. said it will seek Federal Reserve Board clearance to underwrite mutual funds and corporate debt securities if the current Congress doesn't grant such powers to commercial banks.</br></br>Thomas Labrecque, president of the nation's second-largest banking company, made the comments at the annual convention of the American Bankers Association here, as bankers increasingly conclude that Congress will adjourn soon without amending or repealing the Glass-Steagall Act of 1933, which limits banks' underwriting powers.</br></br>"We're ready to file," Mr. Labrecque said. "We won't let grass grow under our feet, but we'd like to wait and see if we get legislation first."</br></br>The Chase executive stopped short of saying that the bank also would ask the Fed for authority to underwrite corporate equities, such as common stocks. However, Chase bankers have said the bank would seek this power eventually.</br></br>Mr. Labrecque said that the jurisdictional dispute between Rep. Fernand St Germain (D., R.I.), chairman of the House Banking Committee, and Rep. John Dingell (D., Mich.), chairman of the House Energy and Commerce Committee, has made it unlikely that the House will act before adjourning. Earlier this year, over the objections of securities firms, the Senate passed a bill expanding banks' securities powers.