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Today's Lesson from The Secret Agent
by Joseph Conrad
"This is what you should try for. An attempt upon a crowned head or on a
president is sensational enough in a way, but not so much as it used to be.
It has entered into the general conception of the existence of chiefs of
state. It's almost conventional--especially since so many presidents have
been assassinated. Now let us take an outrage upon--say a church. Horrible
enough at first sight, no doubt, and yet not so effective as a person of an
ordinary mind might think. No matter how revolutionary and anarchist in
inception, there would be fools enough to give such an outrage the character
of a religious manifestation. And that would detract from the especially
alarming significance we wish to give to the act. A murderous attempt on a
restaurant or a theatre would suffer in the same way from the suggestion of
non-political passion; the exasperation of a hungry man, an act of social
revenge. All this is used up; it is no longer instructive as an object lesson
in revolutionary anarchism. Every newspaper has ready-made phrases to explain
such manifestations away. I am about to give you the philosophy of bomb
throwing from my point of view; from the point of view you pretend to have
been serving for the last eleven years. I will try not to talk above your
head. The sensibilities of the class you are attacking are soon blunted.
Property seems to them an indestructible thing. You can't count upon their
emotions either of pity or fear for very long. A bomb outrage to have any
influence on public opinion now must go beyond the intention of vengeance or
terrorism. It must be purely destructive. It must be that, and only that,
beyond the faintest suspicious of any other object. . . ."
=====
The Fourth Estate
Film Skewers 60 Minutes
Mike Wallace and Don Hewitt: as full of shit as ever.
"The Insider" is dynamite. It hasn't even gone off yet and already debris is
falling and people are claiming to have been hurt. The fact-based film, which
will have its gala Washington premiere Nov. 4 at the Uptown Theatre, has
sparked a furious war of words between movie people in Hollywood and
broadcast journalists in New York.
Before it's over, this skirmish between celebrities may widen into a war
between giant corporate mega-powers--Disney, which made the film, on one side
and CBS Inc. on the other, with individuals caught in the crossfire. And that
is partly what the movie itself is all about.
Mike Wallace, star correspondent of "60 Minutes," is depressed and saddened
by the film and calls it a "betrayal," though he's yet to see it and bases
his objections on reading the script. Don Hewitt, creator and executive
producer of "60 Minutes," is on the proverbial warpath and, says Wallace,
"the closer it comes, the more exercised he's been getting."
They both complain that Michael Mann, the film's director, "refuses" to show
them the completed film. "I can't show it to them," Mann says from Hollywood.
"And the reason I can't is that at every opportunity they have attacked the
picture, attacked me and misrepresented past history. On the day the
president of CBS News called to ask me for a screening, the publicist for '60
Minutes' was taking shots at me in the press. It makes no sense to show them
the film."
Wallace and Hewitt are worried about the movie because it exhumes a dark,
sorry period in the otherwise virtuous life of "60 Minutes." In 1995, the
program was to broadcast an interview with Jeffrey Wigand, a scientist and
former vice president at Brown & Williamson Tobacco Corp. In the interview,
Wigand said that company CEO Thomas E. Sandefur Jr. lied to Congress when he
claimed ignorance about the addictive nature of nicotine.
Wigand had been a reluctant whistle-blower, courted and prodded by "60
Minutes" segment producer Lowell Bergman into going public despite
considerable risk to Wigand's career and personal life. But at the last
minute, CBS News executives, including Hewitt, backed down from airing the
interview when a CBS Inc. attorney told them Brown & Williamson could sue the
network for billions if it aired.
Humiliated, Wallace went on the air with a weak Big Tobacco story in which
Wigand was not identified, his face was obscured and his remarks were heavily
censored. Wallace told viewers that CBS Corporate had made the decision.
Bergman, infuriated by what seemed shameful cowardice, leaked the story to
New York newspapers and finally, nearly three months later, "60 Minutes"
viewers saw the Wigand interview that had been withheld. Bergman subsequently
left CBS out of disillusionment with the system.
Wallace is upset because he fears the film makes it look as if he didn't
fight hard enough to get the original story on the air. Earlier this year, he
fired off a series of letters to Mann objecting to portions of an early draft
of the script by Eric Roth, whose previous screenplays include "Forrest
Gump." Mann's credits include "The Last of the Mohicans," "Heat" and the NBC
series "Miami Vice."
One of the ironies of the story is this: In the film, Wallace is portrayed
(by dashing actor Christopher Plummer) as being worried to the point of
obsession about how the scandal will affect his "legacy" as a journalist and
an American icon. Now the real Wallace is similarly obsessed with how the
film will affect his legacy and the public's perception of him as courageous
and truthful.
When asked about the film, Hewitt tries to laugh it off. "People tell me it's
very boring and too long," he says. The film does run a little more than 2
1/2 hours, and film critics will be screening it for the first time this
weekend. But this reporter can testify, on the basis of an advance screening
in September, that by no means is the movie "very boring." It is riveting and
shocking and deeply moving. Pat Kingsley, Mann's publicist, isn't just being
a publicist when she predicts it could be one of the five Oscar nominees for
Best Picture.
Russell Crowe, who gained 30 pounds to play the role of Wigand, seems a cinch
to get a Best Actor nomination. Bergman is played by Al Pacino, another
potential nominee. The film really is about Wigand and Bergman more than it's
about Wallace or Hewitt. It's the story of one man confronting awesome
corporate forces and seeing his life all but destroyed for daring to come
forward and tell the truth.
Bergman's character, who is seen encouraging Wigand to go public, reassuring
him and earning his trust, is enraged when the report doesn't air. As his
ordeal goes on, Wigand's career collapses, his wife leaves him and he
literally fears for his life. A message on his computer flashes: "WE WILL
KILL YOU."
Hewitt is making quite a tremendous fuss about the film, considering that he
doesn't think it will do well at the box office. "The public doesn't know
what 'tortious interference' is," he scoffs. "They think it's something from
a football game." Actually, "tortious interference" was the basis for the
specious legal argument made by CBS lawyers who warned against airing the
piece. Wigand had signed an agreement with Brown & Williamson not to discuss
company business if he left the firm. But a state attorney general in the
South found ways around that gag order by getting some of Wigand's testimony
into court records.
"This was a corporate blunder," Hewitt says of the decision not to air the
report as scheduled. "Nobody here at '60 Minutes' was in agreement with the
corporation. Short of a bunch of guerrillas with guns taking over the CBS
transmitters, there was no way for us to put it on the air the first time.
CBS owns the means of getting that story to the public."
Not only that, but CBS Inc. was in play at the time, hoping to be sold to
Westinghouse, and the corporate lawyers, some of whom stood to gain
financially from the sale, didn't want anything to endanger the deal. Then
there was a precedent to wrestle with: In June of 1995, ABC settled a $10
billion libel suit filed by the Philip Morris Cos. rather than go to trial in
a Richmond courtroom and very possibly lose the case. ABC apologized for a
report about Big Tobacco, and that made ABC News insiders furious.
If Brown & Williamson had sued CBS, the case would have been tried in the
tobacco-growing state of Kentucky, and merely filing for an appeal if the
jury found for Brown & Williamson could have cost CBS $1 billion.
The Hewitt-Wallace attack on the film gets personal. And ugly. They both
accuse Bergman of negotiating with Mann to do a movie about the case while it
was still going on. They say Bergman was frequently on the phone with Mann
and took copious notes during all the meetings inside CBS. From North
Carolina, where he is working on a documentary for the PBS "Frontline"
series, Bergman says the Wallace-Hewitt version is a lie.
"I had met Michael, and he was one of many people I spoke to for guidance
during the crisis," Bergman says. "But the movie idea didn't happen until
January of 1996." Bergman says he wanted out of CBS and called another
friend, Disney executive Susan Lyne (coincidentally or not the wife of
another "60 Minutes" producer, George Crile), about getting a job as a
consultant. Bergman thought there were many stories he'd worked on at "60
Minutes" that might be the basis for movies. But "Susan and George both said
to me, 'The real movie here is what's going on at "60 Minutes," ' " Bergman
says.
"Am I on speaking terms with Lowell Bergman? Not anymore," says Wallace. "In
February, he came to my apartment asking for my help in getting a job on '60
Minutes II.' " Wallace says he was flabbergasted that Bergman would request
such a favor with the movie in pre-production. "Lowell went to Mike's
apartment to see about getting a job here," Hewitt also says. "Here he is
[urinating] all over CBS in a movie and trying very hard to get back here."
"That is nonsense," says Mann in Bergman's defense.
Bergman, who worked at CBS News from 1983 through '96, insists it's not true,
or even close. "These allegations are fantasies they're having," Bergman
says. "I feel sad for them that they have to make things up." In addition to
working as an independent documentary producer, Bergman writes for the New
York Times and teaches at the University of California at Berkeley.
Wallace's many letters had to do with what he considered factual inaccuracies
in the film. Some lines were changed, Mann says, insisting that he based his
changes on consultations with Bergman. "I made no changes because Mike
requested them," Mann says flatly.
Some of these changes have already been reported. In the first scene of the
original script, Bergman (Pacino) is in Iran setting up a difficult interview
with some nutty Iranian official. Wallace, scheduled to fly in and do the
interview, calls Bergman from New York and asks whether the hotel is
luxurious and whether its bathrooms have Jacuzzis.
All the feuding parties agree on one thing: This never happened. The line
about Jacuzzis is not in the finished film. "Lowell said Mike would never ask
that kind of thing," Mann says. "Mike is not that concerned about creature
comforts."
One line that remains in the movie will probably get a big laugh even from
the people who might be offended by it--employees of National Public Radio.
Late in the film, worried about his legacy and even about getting fired if he
fights too hard to air the Wigand interview, Wallace (Plummer) bellows, "I
don't plan to spend the end of my days wandering in the wilderness of
National Public Radio!"
That's actually a change. Mann says the original line was "I'm not going to
spend the end of my days wandering in the wilderness like Walter Cronkite!"
In dredging up ammunition to use against the film, it was inevitable that
someone at CBS point out that "Insider" is being released by Disney, which in
turn owns ABC, home of ABC News and "20/20," a respected show but hardly in a
league with "60 Minutes." Hewitt is not too proud to seize on this line of
attack.
"ABC News is in a life-and-death struggle with '60 Minutes,' " Hewitt says.
"Who owns ABC News? Disney. Who made the movie? Disney. Who keeps ABC News
from doing a story about pedophilia at Disney theme parks? Disney." Asked
whether Disney would ever release a movie as critical of "20/20" as "Insider"
is of "60 Minutes," Hewitt says, "There is no movie about '20/20.' But if
there were, it certainly wouldn't be made by Disney."
Apprised of Hewitt's tirade, ABC corporate vice president Patricia J. Matson
said, "This is such a ridiculous notion that I don't think even Don Hewitt
believes it."
Mann says there actually once was a line of dialogue in the script about the
way ABC News capitulated to Philip Morris: "ABC caved, paid and retracted,"
someone said. Mann said an ABC executive actually wanted the line left in,
partly perhaps to show that Disney movies and ABC News do not interact at
all. Mann cut it for continuity reasons, he says, but he promises to put it
back in a special TV version of the film he is now editing. The TV version
will be longer than the theatrical film because Mann wants it to be a
two-night miniseries. Thus it'll run three hours and take up four hours of
air time (the rest filled, of course, by commercials).
Might ABC show the film? It depends who offers the most money for the TV
rights, Mann says. It doesn't seem likely CBS will be in there bidding.
Although Hewitt's under the impression that his real name is not used in the
film, it is. So are many other real names. But one man who escapes that fate
is Eric Ober, who was then president of CBS News and who, according to
several sources at CBS, was one of the first to give in to the lawyers'
recommendations and even wanted to kill the piece altogether. But there's no
Eric Ober in the film. He's called Eric Kuster because, Mann explains, a line
of dialogue from another person is put in the character's mouth and thus the
character becomes a composite. Maybe it's another way not to get sued.
At one memorable point in "The Insider," a CBS lawyer tells the newspeople
that if Wigand's charges against Brown & Williamson were untrue, the network
would have no problem, or legal liability, in airing them--but the fact that
they apparently were true made it impossible. At which point, Pacino as
Bergman asks, "Is this 'Alice in Wonderland'?!"
In some aspects, the story of CBS News vs. Michael Mann and "The Insider" has
its Alicey aspects too. After all the fur has flown, the last charge leveled
and denied, and the film finally opens and is seen by an audience, even
Wallace and Hewitt may soften in their virulent opposition.
After all, the big sticking point to Wallace is not going to be a major topic
of discussion for the general audience: At what point did Wallace break with
Hewitt and CBS executives and decide the bowdlerized piece should not have
aired and that the original interview should? Wallace says it was a matter of
days ("48 to 72 hours") but Bergman says it was a matter of months.
What Wallace will see as the film's most damning moment comes when Bergman
appeals to him to fight the good fight and instead, Wallace says tersely,
"I'm with Don on this."
In his New York office, Wallace riffles through letters and other documents
as he strives to prove his point about the timing of events and what he said
when. Finally he takes a deep breath and sums up his feelings:
"I haven't been granted a chance to view 'The Insider,' " Wallace says,
slowly and softly. "But if what I hear from others who have seen it is
accurate, it simply does not reflect the truth of what happened here at '60
Minutes.' Everyone at CBS Incorporated and CBS News knew that I
insisted--after a 48-hour mistake--on broadcasting the original piece. And to
suggest that I lost my moral compass only to find it again under the tutelage
of Lowell Bergman is asinine.
"He knows it, Mr. Mann knows it. But the deception helps the drama. I don't
like being used in the fashion with which they are using me."
The good news for Mike Wallace may turn out to be that his legacy is far more
secure than he thinks it is. He is a giant figure in the history of network
news. Mann says what his movie is about is that beneath the clash of
corporations and the legal battling, human beings were involved, with their
fates and fortunes at stake. "All humans are flawed," he says, and he made a
concerted effort not to mythologize Wigand, showing him to have imperfections
and to have made foolish decisions.
That humans are prone to error shouldn't be a very controversial stance to
take. Maybe what Hewitt and Wallace are doing is further proof, because with
all their vociferous objecting, they could help turn a movie that's
commercially iffy into a smash hit. Whether or not it plays in Peoria, "The
Insider" is likely to be the most talked-about movie in media circles since
"All the President's Men."
The Washington Post, October 15, 1999
US Treasury Bonds
Bond Prices Continue to Plunge
Yields reach 1997 peak.
The yield on the benchmark 30-year Treasury bond yesterday challenged its
highest level in two years, signalling growing fears that US interest rates
will continue to rise.
In midday trading on Wall Street, the long bond was yielding 6.34 per cent,
pushing past last year's high of 6.28 per cent in August. Levels above 6.3
per cent were last seen in October 1997.
The immediate catalyst for the fall in Treasury prices were retail sales
figures showing no slowdown in consumer spending in September, despite two
quarter-point interest rate increases. While broadly in line with
expectations, the retail figures aggravated fears that the Federal Reserve
would again raise rates to head off inflation in the buoyant US economy in
its 10th year of expansion.
Rising Treasury yields should in themselves help curb consumer spending
because they set the underlying price of many types of consumer credit.
Rising interest rates, for example, are being felt in the country's housing
market. Over the past 13 weeks, applications for mortgage refinancings have
plummeted by 78 per cent year-on-year, suggesting consumers are no longer
boosting their capacity to spend.
The rising yields are driving up the cost of borrowing for US companies. Over
the past quarter, the rate of corporate bond issuance has declined steeply -
by about 40 per cent since the previous quarter, according to Thomson
Financial Securities Data.
Higher bond yields may well be needed to persuade overseas investors to fund
the ever-widening US trade deficit, which has reached $25bn a month. Recent
dollar weakness against the yen has sharply reduced the incentive for
Japanese investors to hold Treasury bonds.
According to the Federal Reserve, foreign investors in the first half of 1999
were net sellers of $44.4bn in Treasuries on a annualised basis. By
comparison, they were net buyers of $224.9bn of Treasuries on an annualised
basis in the fourth quarter of 1998.
Since bonds are an investment alternative to equities, rising yields have put
pressure on the stock market. The Dow Jones Industrial Average fell 400
points on Tuesday and Wednesday and showed little sign of rebounding in early
trading yesterday. In turn, Wall Street's weakness has put pressure on
European stock markets. Frankfurt suffered its third consecutive loss of more
than 1 per cent yesterday.
The Financial Times, October 15, 1999
Nukes of Hazard
Pakistan Declares Martial Law
Sharif had planned to arrest or assassinate Musharraf.
PAKISTAN's generals imposed martial law late last night and faced up to a
major clash with the international community following the rejection of their
plans to put together a caretaker civilian government to lead the country to
early elections following the bloodless coup.
In a statement released shortly before 10pm - 2am in Pakistan - the army
which overthrew the civilian government on Tuesday declared a proclamation of
emergency which included martial law regulations. It suspended the
constitution and parliament and ordered that "the whole of Pakistan will come
under the control of the armed forces of Pakistan ".
The decision, which came despite earlier private assurances by the military
to western diplomats in Islamabad that the introduction of martial law had
been ruled out if at all possible, will cause financial chaos in the debt
stricken country. It came two days after Gen Pervaiz Musharraf ousted the
democratically-elected government.
In a statement, the army said "the constitution of the Islamic Republic of
Pakistan shall remain in abeyance". It said: "The whole of Pakistan will come
under the control of the Armed Forces of Pakistan." The actions followed
international appeals for a restoration of constitutional democracy.
Gen Musharraf yesterday met with politicians, including the President, Rafiq
Tarar. However, the President was said to have rejected repeated attempts to
provide a "constitutional cover" to legitimise Tuesday's coup. The ousted
Prime Minister, Nawaz Sharif, who was being held under house arrest, was
refusing to resign. The military was said to have given up hope that MPs
would support a vote of no confidence in Mr Sharif if parliament were
recalled.
The Pakistani military had given private assurances to Western diplomats in
Islamabad that the introduction of martial law would be avoided if at all
possible. However, troops sealed off the parliament on the eve of a scheduled
meeting of the national assembly.
The building was evacuated. The clear intention appeared to be that the
military would prevent today's meeting taking place, at which supporters of
Mr Sharif had planned to protest against the coup. Several MPs from Lahore
said last night that they still intended to go to parliament and the prospect
of clashes with the army could not be ruled out.
While the international community waited for a statement of intent from Gen
Pervaiz Musharraf, who led the coup, the Karachi stock market lost more than
nine per cent of its value when the stock exchange reopened for the first
time after the takeover.
The State Bank of Pakistan, which had called a bank holiday on Wednesday,
also took desperate measures to hold on to its meagre foreign exchange
reserves amid the continuing uncertainty. The bank ordered money changers and
foreign exchange traders who work outside the mainstream banking system to
remain shut until next Wednesday.
Commercial banks were told that the few facilities available to send foreign
currency abroad were no longer open. It also emerged last night that Mr
Sharif had ordered forces loyal to him to arrest, or even assassinate, Gen
Musharraf.
They said Gen Musharraf's Airbus aircraft flying him from Sri Lanka to
Karachi on Tuesday evening was ordered to a site where he was to be detained.
The general insisted that the plane return to Karachi but it was refused
permission to land. Only when troops loyal to the general took control of
Karachi airport could the plane land.
A senior officer said last night that the army had acted in "great haste" in
overthrowing Mr Sharif and they wanted to do "the right thing" for the
country. While the international community considered its options, Sir David
Dain, British High Commissioner, and Bill Millam, the American ambassador,
cut short their leave to return early to Pakistan.
The London Telegraph, October 15, 1999
Japanese Finance
Sumitomo & Sakura to Merge
Why are Japanese bank stocks like US Internet stocks?
TOKYO - Setting aside a century-old rivalry, two of Japan's most powerful
commercial lenders said Thursday that they planned to merge, forming the
world's second-largest bank and adding powerful momentum to the nation's
corporate overhaul.
Executives from Osaka-based Sumitomo Bank Ltd. and Tokyo-based Sakura Bank
Ltd. said they planned to unite by 2002 to cut costs, broaden their business
abilities and pump more money into computers and on-line services.
The announcement - the third big bank merger announced here in as many months
- provoked an almost giddy response from analysts and investors, many of whom
have gazed on Japanese banks with jaundiced eyes for years.
''You wait and wait for things to start happening around here, and just when
you're about ready to throw in the towel in disgust - wham - it all starts
happening at once,'' said J. Brian Waterhouse, a veteran Japan bank watcher
for HSBC Securities (Japan) Ltd.
''I think we're right at the beginning of major transformation in the
Japanese financial sector. It's a tsunami, and you can either ride it or get
drowned.''
Historically, Sumitomo and Sakura have functioned as the vital centers of
fiercely competitive industrial groups known as keiretsu.
Many companies in the two banks' keiretsu are direct competitors. Analysts
predicted that the union would be followed by a flurry of ''shotgun
weddings'' among bank clients.
''This creates tremendous pressure on the banks to restructure borrowers with
more enthusiasm than they've shown in the past,'' said Kathy Matsui, Japan
strategist for Goldman Sachs.
''I see it as a big positive, not just for banks, but for the whole Japanese
stock market.''
The Nikkei stock average rose only slightly Thursday, but bank shares soared,
with Sakura Bank's shares rising 100 yen, or 10 percent, to 1,000 yen ($9.42)
and Sumitomo Bank's shares rising 170 yen, or nearly 11 percent, to 1,735.
With those gains, share prices for Japan's major banks have climbed a
dizzying 225 percent since last October - not bad, say analysts, for a sector
in which only one player, Bank of Tokyo-Mitsubishi Ltd., showed a profit for
the most recent financial year.
''Japanese banks are approaching world valuation levels for banks that
actually make money,'' said Robert Zielinski, an analyst at Lehman Brothers.
At a news conference in Tokyo, both Sakura's president, Akishige Okada, and
Sumitomo's president, Yoshifumi Nishikawa, brushed aside concerns about the
difficulty of forging a successful partnership across keiretsu lines.
''With the globalization of the financial sector, old notions about domestic
Japanese industrial groups don't cut it,'' Mr. Nishikawa said. ''If we don't
cast off this idea of preserving the group, there's simply no way for us to
develop.''
Sakura Bank serves as the ''main bank'' for the venerable Mitsui group, whose
blue-chip roster includes Mitsui & Co., the global trading house; Mitsui
Fudosan Co., the giant real-estate developer; Mitsui Engineering &
Shipbuilding Co., and the Mitsukoshi Ltd. chain of department stores.
Sumitomo Bank is the main bank for the Sumitomo group, whose major members
include the trading company Sumitomo Corp., Sumitomo Heavy Industries Ltd.,
Sumitomo Metal Mining Co. and the electronics giant NEC Corp.
Many analysts and others described the Sumitomo-Sakura tie-up as part of a
much broader restructuring process that could eventually leave Japan with
only four or five major banks.
In August, three others - Dai-Ichi Kangyo Bank Ltd., Fuji Bank Ltd. and
Industrial Bank of Japan Ltd. - announced plans to merge operations by 2002,
creating the world's largest banking group, with assets of $1.3 trillion.
Some bank analysts here have begun to call that combination ''Godzilla
Bank.''
Sumitomo Bank and Sakura Bank have combined assets of $925 billion
Also this month, Asahi Bank Ltd. and Tokai Bank Ltd. announced plans to
merge, producing an entity with combined assets of about $500 billion.
Bank of Tokyo-Mitsubishi is currently Japan's largest bank, with assets of
about $600 billion.
But the latest deal prompted talk that Tokyo-Mitsubishi, created just three
years ago by combining Japan's premier international lender with the main
bank of the nation's biggest keiretsu, could need another partner.
International Herald Tribune, October 15, 1999
US Financial Markets
Treasury, Fed Agree to Kick Out Glass-Steagall
Summers and Greenspan kiss and fondle.
The US Treasury and Federal Reserve yesterday reached agreement over bank
regulatory powers, clearing the way for a restructuring of the financial
services industry.
Lawrence Summers, Treasury secretary, and Alan Greenspan, the Fed's chairman,
hammered out the deal as a congressional conference prepared to negotiate a
final bill to overhaul dated financial laws which separate banks from brokers
and insurers.
The agreement between the Treasury and Fed ended months of dispute and paved
the way for legislation to allow a new breed of financial conglomerates.
James Leach, chairman of the House banking committee and leader of the
congressional conference, said: "The Treasury-Fed agreement puts us closer
than ever before to writing financial services modernisation legislation.
Let's finish the job."
However, lawmakers were later deadlocked over Republican attempts to create
loopholes in community reinvestment laws which require banks to lend to poor
communities. The White House has pledged to veto the bill if the community
lending provisions are weakened.
Mr Summers said: "There are other crucial issues that remain to be resolved
before financial modernisation legislation can be passed that will be
acceptable to the president."
Phil Gramm, the Texas Republican senator who has led the attack on the
community reinvestment act, accused the administration of seeking "a massive
extension" of the laws.
Lawmakers and industry lobbyists remain cautiously optimistic over the
prospects of a successful final bill, after more than two decades of failed
efforts to repeal the laws.
The deal between Mr Summers and Mr Greenspan ended a turf war between the two
banking regulators over which set of officials is to lead supervision of the
new financial conglomerates.
The Fed argued that the new companies should manage their services, under its
supervision, as part of a bank holding company. Treasury officials said the
companies should have the freedom to choose to place their new operations,
under their supervision, in the operating subsidiary of a bank.
The compromise announced yesterday allows both structures, but with
restrictions on subsidiaries supervised by Treasury officials.
Banks could offer securities underwriting through their subsidiaries, but
would be prohibited from insurance underwriting and real estate investment.
A decision on whether to allow subsidiaries to run merchant bank activities
was deferred for five years. But the two sets of officials agreed to limit
the total assets in subsidiaries to less than $50bn, or 45 per cent of the
parent bank's assets.
The Financial Times, October 15, 1999
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
Omnia Bona Bonis,
All My Relations.
Adieu, Adios, Aloha.
Amen.
Roads End
Kris
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