Secret Wall Street Group Pushes Vote on Bank Curbs
A secret campaign by three influential Wall Street investment banks led to the securities industry's startling move to consider dropping its longstanding fight to keep banks out of the securities business.</br></br>The close-knit Wall Street group, among other moves, placed one of its members into the leadership of the Securities Industry Association, the main trade group for the nation's brokerage firms. The executive, Robert N. Downey, a partner at Goldman, Sachs & Co., will become chairman of the SIA at this week's annual meeting in Boca Raton, Fla.</br></br>Today, directors of the SIA are likely to approve a proposal that would effectively end the securities industry's bitter, decades-old fight to preserve the Glass-Steagall Act of 1933, which prohibits commercial banks from underwriting or selling almost any kind of corporate stocks or bonds to the public. But some SIA officials say there still could be opposition from some members, and that any vote won't amount to a rubber stamp.</br></br>The proposal, which calls for the SIA to support the relaxation of Glass-Steagall, comes almost a year after the start of private meetings between three top Wall Street executives aimed at reversing the SIA's traditional opposition to changes in Glass-Steagall.</br></br>The executives, who held frequent discussions, are Richard Fisher, president of Morgan Stanley & Co.; Mr. Downey of Goldman Sachs, and Michael Raoul-Duval, a managing director and member of senior management at CS First Boston Inc., according to lawyers and others familiar with the group's work. The three executives declined to comment about their meetings.