Comptroller: Market Fears Over Banks Are Misplaced
Comptroller of the Currency Robert L. Clarke criticized a jumpy Wall Street yesterday for failing to distinguish between well-managed banks and those that are having problems because of a softening real estate market.</br></br>Concerns over the dangers to banks and thrifts from weakening commercial and residential markets have nagged Wall Street in recent weeks and on Monday touched off a rout that helped drive down the Dow Jones industrial average 42 points, its sharpest drop in five weeks. Although the market stabilized yesterday, brokers said investors remained uneasy about the outlook for real estate, finance and regional banks.</br></br>Clarke, whose agency regulates national banks, said he was "a little bit surprised" that fears about real estate problems in the Northeast and elsewhere had such a wide impact in the stock market Monday. Bank stocks, thrifts and federal agencies tied to the mortgage markets all came under pressure.</br></br>While acknowledging that some banks, like Bank of New England Corp., are having problems, Clarke said many banks in the Northeast and other areas are doing well.</br></br>MNC Financial Corp., Maryland's biggest banking company, is an example of a bank taking an undeserved beating in the market, according to Nancy Bush, banking specialist for Dean Witter Reynolds Inc.