The Washington Post (1974-Current file); Feb 3, 1988;
Nicholas F. Brady, the investment banker who directed a study of last OctoberÛªs stock market collapse for President Reagan, warned Congress yesterday that the market could collapse again unless swift action is taken to reform some of its rules and practices.</br></br>Brady told members of the Senate Banking Committee that Congress should pressure the securities industry to adopt immediate reforms and needs to be ready to overhaul stock market regulation through legislation.</br></br>ÛÏWe must act to prevent a reoccurrence of the events of October," said Brady, who runs Dillon, Read & Co. ÛÏWe are looking down the barrel, and the gun is still loaded."</br></br>Shortly after Brady testified, the Securities and Exchange Commission released a 2Û÷A-inch-thick study of the October market collapse. Its primary conclusion was that steps need to be taken to diminish volatilityÛÓviolent swings in prices.</br></br>Brady reiterated his view that the Federal Reserve BoardÛªs authority over the nationÛªs financial markets should be expanded on key issues, including trading halts and minimum financial requirements, or margins, for investors.