Full text of Statements and Speeches of Robert T. Parry : Remarks on Deregulation and Supervision : Supervision, Regulation and Credit Department, Annual Conference

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REMARKS ON DEREGULATION AND SUPERVISION

A nnual Con f e r e n c e
Su p e r v i s i o n , R e g u l a t i o n

February

and

18,

of

the

Credit Department

1986

R o b e r t T. P a r r y , P r e s i d e n t
F e d e r a l R e s e r v e Bank of San Fr a n c i s c o

I AM G L A D
ANNUAL

TO

HAVE

THIS

CONFERENCE.

I

OUTLOOK

WAS

ECONOMIC

AND

C H A N G E D J O B S SO T H A T

For

some

SUPERVISION
BACKGROUND

AS

AN

I

THA T

I HAVE A DIFFERENT

DOCUMENTS

TO

KNOWLEDGE,

BANKING

AND
MY

—

1982

ON

PROCEEDINGS

bank

OBSERVER,
BUT

ALSO

OF

IN

THE

THAT

regulation

PA R T

BECAUSE

BECAUSE

SECURITY

SUPERVISORY

P O INT ,

MASTER

I

and
OF

MY

PACIFIC,

SCRUTINY.

BUT

NO W

I E X P E C T TO BE A B L E TO S A Y

AS

AND

I
OF

THE

DETAIL

OF

H, Y A N D SO ON.

I WOULD

SUPERVISORY
VIEWS

SUPERVISION

TH E

followed

have

VANTAGE

REGULATIONS

OF S U C H

MODIFY

BY

IN

AT Y O U R

ENJOY BANK SUPERVISION.

YET

—

PREVIOUSLY

YO U

I N V I T E D BACK.

IS A R E C I P I E N T

THAT I A C T U A L L Y

TO T A L K W I T H

IMPRESSED

ECONOMIST,

ALL

HAVE

SO

INTERESTED

AN

BANKS ,

TALKED

I W O U L D BE

LIKE

I

HAD

ti me ,

AS

OPPORTUNITY

LIKE

TO S H A R E

MATTERS.
BECOME

MYSTERIOUS

BUT WITHOUT

T HE B E N E F I T

SOME

I HAVE

MORE

COURSE,

THOSE

NO

INVOLVED

AFTER GENE

OF MY O W N

IDEAS ON

DOUBTS

THAT

IN

WORKINGS

THE

AND HARRY

HAVE

I WILL
OF

HAD M O R E

TI M E TO W O R K ON ME.

TO

BEGIN,

I WOULD

RESPONSIBILITIES,
Monetary
BANK
the

policy

PRESIDENT'S
Federal

CURRENT
POLICY



AND

LIKE

MONETARY

TO

POLICY,

deliberations

TIME,

Open

AND

Market

FUTURE

EFFECTIVELY,

COURSE

SAY

A WORD
AND

take

a

DESERVEDLY

Committee
OF

HOWEVER,

THE

ITS
large

SO.

ABOUT

ON E

LINKS

TO

portion

THE

MY

profound

EC O N O M Y .

To

of

a

effects

IMPLEMENT

SUPPORTIVE

MAJOR

SUPERVISION.

DECISIONS

have

REQUIRES

OF

reserve

MADE
on

BY
the

MONETARY

SUPERVISORY

AND

-

2

-

R E G U L A T O R Y P O L I C Y FOR A N U M B E R OF R E A S O N S .

F irst, the

IF

THE

CONFIDENCE

BANKING

AND
IN

FINANCIAL

LINKS

THE

EFFICIENCY

P OS E

COORDINATION

central

to

the

OF

B UT
IN

AND

money

creation

LIGHT

OF

BANKS

A

SYSTEM,

HOWEVER,

OF
ON

THE

WHAT

TODAY'S

CRITICAL
PROVIDE

THAT

ENHANCES

O C C A S I O N A L L Y MA Y
ARGUES

THEREFORE,
FEDERAL

THE

FO R

WE

NEED

RESERVE

ROLE

OF

AND

BANKING

MONETARY

OF

TH A T

TOO,

POLICY.

CRISES

ARE

POLICY

THIS ,

BANKING

FOCUS

FREQUENT

SYSTEMS

ECONOMY.

PARTICIPATION
RATHER

TO

CREDIT

PROBLEMS.

MONETARY

SUPERVISION,

OUR

PRONE

ADDITION,

AND

FINANCIAL

CONTROL

TH E

BE

WERE
In

PAYMENTS

OF T H E

DEFEND

SHOULD

SYSTEM

THROUGHOUT

MONETARY

NO T

is

INSTABILITY.

ELEMENTS

T HE

system

It W O U L D BE D I F F I C U L T TO A R T I C U L A T E AND M A N A G E M O N E T A R Y

PROCESS.
POLICY

banking

IN

SUPERVISION
POLICY

ENVIRONMENT.

One

MAJOR

OF A N U M B E R
OF

BANKS

OF

THAT

ENVIRONMENT

OF L O N G - S T A N D I N G

AND

OTHER

"DEREGULATION"
FACT,

FACET

DOES

DEREGULATION

REGULATIONS

FINANCIAL

HAS

BEEN

GOVERNING

INSTITUTIONS.

NOT

NECESSARILY

HAS

INCREASED

IMPLY
THE

RELAXATION

THE A C TIV IT IE S

T h IS

LESS

NUMBER

TH E

PROCESS

SUPERVISION.
OF

WAYS

IN

OF
In

WHICH

B A N K S AN D H E N C E T H E B A N K I N G S Y S T E M M A Y B E C O M E E X P O S E D TO RISK:

(1)

Banks
AS

now

WELL

PROBLEM



compete

AS
THIS

THE

for

retail

LOCATION

POSES

IS

deposits

AND

THAT

QUALITY

UNDER

on

OF

CURRENT

the

basis

SERVICES.
DEPOSIT

of

price

ONE
INSURANCE

-

PROCEDURES,
CAN

RISKY

ATTRACT

INSURED

B I D D I N G UP THE
TH E Y

—

BANKS

BUT

-

UNABLE

TO A T T R A C T W H O L E S A L E

RETAIL

P R IC E.

NOT

3

FOR

THE

DEPOSITS

RAPIDLY,

SIMPLY

B A N K S ON TH E B R I N K OF

BANKING

SYSTEM

—

MAY

DEPOSITS
BY

INSOLVENCY,

HAV E

LITTLE

TO

LOSE FR O M S U C H S U R V I V A L S T R A T E G Y .

(2)

Because

regional

BARRIERS

TO

POTENTIAL

familiar

SE,

(3)

.

N ew

EXPAND

ENVIRONMENTS

FEW

SAVINGS

AND

TREND

PARTICULARLY
BANKING

BANKS

AND

BANKS

WHICH

long

run

ARE

MORE

to

NOW

INTO

THEY

break

HAV E

down

GREATER

MARKETPLACES

MAY

NOT

interstate

LIKELY

BE

TOTALLY

banking

TO M A K E

AND

, per

MISTAKES

INTO U N F A M I L I A R T E R R I T O R Y .

have

been

LOAN

ASSOCIATIONS.

L E V E L OF R I V A L R Y

beginning

ACTIVITIES

WITH
the

IN T H E I R E X P A N S I O N

powers

The

in

RISKS,

are

BANKING,

THEIR

Although

POSES

EARLY

INTERSTATE

TO

COMPETITIVE

compacts

afforded

t n e a r -b an k

entities

T h IS E X P O S E S

such

BANKS

TO

as

A NE W

IN M A N Y A S S E T A N D L I A B I L I T Y P R O D U C T LINES ,

OF

DEREGULATION

THROUGH

CONTINUED

EXPANSION

OF

IS

LIKELY*

TO

LIBERALIZATION

PRODUCT-LINE

OF

POWERS

OF

CONTINUE,
INTERSTATE

BANK

HOLDING

COMPANIES.

L e t 's
IN F A V O R

look

OF

ARE N A T I O N A L .



first

at

INTERSTATE
THEY

AR E

interstate

BANKING.

banking

TH E

COMPETITIVE

.

PRINCIPAL

To

be

direct

FINANCIAL

A N D W I L L R E M A I N SO.

, I am

MARKETS
ALTHOUGH

4

-

NATIONWIDE

INTERSTATE

CONCENTRATION
LOCAL

NATIONWIDE,

MARKETS

BECAUSE
markets

BANKING

EVE N

OUT-OF-STATE

BANKS

S imply

Arizona,

and

look

other

institutions

at

BE

the

RESULT

BANKS

BE

in

and

BY

INCREASED

of

STILL

MORE

ABLE

number

IN

WOULD

SERVED

WOULD

states

flourish

WOULD

SMALL

MIGHT

,

-

TO

ATTRACTIVE

increase

in

LOCAL

banks

in

to

see

D istrict

the

SURVIVE

ENTER

small

BANKING

number

AN D
BANKS

BANKING

Ca l i f o r n i a ,
how

these

alongside

the

G I A N TS .

W e are
Today

on

n o n -b a n k

INTERSTATE
STATE
the

the

Supreme

FOR

RESORT

BANK

TO

BANK

in

one

channels

COMPANIES

COMPANIES
the

HAVE

OR A N O T H E R .

way

national

HOLDING

HOLDING

CONTEXT,

A

CHANGE

CHANGES

AND

BEEN

process

TO

PREPARE

FOR

ALTHOUGH

IT

ALSO

CAN

MADE

IN

ACQUISITION,
PERIOD

ATTRACTIONS

FO R

BRANCHING,

NATIONAL

Bank

the

TRANSITION

SOME

BE

TO

3(d ) of

INTERSTATE

ORGANIZATIONS

IS

PIECEMEAL

RESTRICTS




provide

Un f o r t u n a t e l y ,

SOLUTION

Am e n d m e n t , S ection

P RE SE NT .

OF

banking

for

REGIONAL

CLEARED

of

BY

geographic

IS S T I L L HI T OR M I S S .

BEST

INTERSTATE

national

subsidiaries

Co u r t .

DEREGULATION

THAN

to

ACTIVITIES

COMPACTS

The

way

STATE
Ho l d i n g

REPEAL

THAT

WOULD

ALTHOUGH

ALLOW

INTERSTATE

TH E

THIS

McFADDEN
ROUTE

SEEMS

A

DOUGLAS

Ac t , which

REPEALED.

ESSENTIAL.

RATHER

THE

Co m p a n y

BE

NOT
OF

LAWS.

SHOULD

NATIONWIDE
IS

LEGISLATION

In

THIS

REGIONAL

BANKING

HAS

STRONG

ACT

TO

CASE
ALLOW

UNLIKELY

AT

If

interstate

CONTRADICTION

IN

barriers

TERMS

WHICH

BANK HOLDING

STILL

REMAIN,

WOULD

~~

COMPANIES

HOWEVER,

UNREGULATED

FINANCIAL

Congress

face

to

were

now

lifted

NOT

ENTER

ABOUT

BE

THE

-b a n k

NEEDED

OWNERSHIP

OF

THIS

Supreme

the

non

A

A

VEHICLE

BY

A PROBLEM WOULD
NON-BANK

QUESTION

Court

—

banks

AS

OTHER STATES.

CORPORATIONS.
that

,

has

IS

given

BANKS

BY

ONE

FOR

the

green

L I G H T TO L I M I T E D S E R V I C E BA NK S.

As

FOR

COMPANIES,
LO N G

AS

BETTER
TO

SPECIFIC
I AM

THE Y
TO

USE

SPECIAL

ALSO

REMAIN

CHANGE

THE

LOOPHOLES

LINES
IN

OF

FAVOR

PRIMARILY
RULES

CREATED

BUSINESS
OF

OPENING

FINANCIAL.

WITH

BY

PERMITTED

BUT

FEDERAL

PIECEMEAL

UP

BANK

MORE

ACTIVITIES

IN D O I N G

LEGISLATION

STATE

HOLDING

SO,

RATHER

LAWS

THAT

banking

has

IT

AS
IS

THAN

CATER

TO

INTERE S T S .

The

issue

of

product

lines

in

several

DIMENSIONS:

(1)

Regarding
by

the

securities

Glass-Steagall

separation
will
OF

corporate

transactions




of

Act.

commercial

re m a i n .

completely,

THE

underwriting,
We

b u t we

and
could

involving

COMMERCIAL

PAPER

can

banking

Restraints
stocks

banks

on

bonds

of'course

expect

from

not

in

going

flexibility.

sophisticated

corporate

ARE

CLOSELY

the

basic

banking

underwriting

to

allow more

MARKET

bound

investment

participation
are

that

ar e

be

relaxed

Certainly,
customers

RELATED

TO

in

BANKING

-

AN D

ARE

AN

AREA

WHERE

6

-

BANKING

REGULATIONS

COULD

SAFELY

BE

RELAXED.

(2)

The

ability

of

ESTATE-RELATED
BANK

HOLDING

BECOME
WE

banking

institutions

ACTIVITIES

ALSO

COMPANIES,

THERE

I N V O L V E D TO S O M E

EXTENT

PROBABLY

COULD

ALLOW

to

COULD
ARE

BE

THE

IN R E A L

EXPANDED

engage

in

real

EXPANDED.
SKILLS

-

WlTHIN

NECESSARY

TO

ESTATE O P E R A T I O N S AND

REAL

ESTATE

POWERS

THROUGH

NON-BANK SUBSIDIARIES.

(3)

IN

ANOTHER

COMPANIES
BANKS

ARE

AR E

INSURANCE
BE

ARE A,

WE

HAVE

ALLOWED

TO

FORECLOSED

IN

SERVICES.

OFFERED,

ONLY

T HE

OWN

DEPOSITORY

MOST

CASES

ALTHOUGH
SMALL

ANOMALY

THAT

INSTITUTIONS,

FROM

OFFERING

CREDIT-RELATED

BANKS

AND

A

INSURANCE
BU T

GENERAL

INSURANCE

FEW

CA N

GRANDFATHERED

t

EXCEPTIONS
This

AR E

results

VARIOUS

ALLOWED
in

TO

serious

FINANCIAL

OFFER

GENERAL

asymmetries

INSTITUTIONS

TO

in

INSURANCE
the

OFFER

LI NES.

abilities

THIS

of

IMPORTANT

SERVICE.

(4)

Bank

holding

SECURITIES

BROKERAGE

Ye t , brokerage
SAVINGS
banks

.

companies

firms

ACCOUNTS
The

cannot

SERVICES
are

MUCH

obvious

M a n a g e m e n t .Ac c o u n t , b u t



also

able

LIKE

WITHIN
to

are

THE

offer

THOSE

example
there

offer

advisory

SAME

short

is
many

AT

Merrill
others

SUBSIDIARY.

-t e r m

AVAILABLE

checkable

COMMERCIAL

L y n c h 's
.

and

The

Cash

logic

of

7

-

THIS

ASYMMETRIC

-

TREATMENT

DESERVES

REVIEW,

AT

THE

VE RY

LEAST.

MY

VIEW

HEALTHY.

We

"MANAGE"

IS

THAT

SHOULD

TH E

NOT

IT BY R E L A X I N G

TO T RY

COMMERCIAL

BANKING

TRY

TO

TOWARD
STOP

LEGISLATION

BY B A C K I N G UP TH E M O R E
SUPERVISION.

TREND

IT,

TO

STOP

BE

BUT

REGULATION

RATHER

AND REGULATIONS

LENIENT RULES WITH
TO

LESSER

WITH

SHOULD

C A R E AN D

E Q U I T A B L E O V E R S I G H T A ND

INNOVATION

OUTFLANKED

WE

IS

ULTIMATELY

BY

WOULD

UNREGULATED

CAUSE

FIRMS

THAT

WOULD TAKE OVER MORE AND MORE BANKING FUNCTIONS.

AT TH E
BANKING

objectives

IT

APPEARED

Sub s e quent

U.S.
OIL

BOTH

PRICES —

LARGE

OF

DECLINING

WORLD

OF

DEBT,
LOANS

BE

CLASSIFIED,

POLICY

IMPLICATIONS.

IMPLICATIONS

high

BUT

A t THIS

LOANS

ARE

BECAUSE
IN

STRICT

example

AT

THE

TERMS
rates

PRICES ,' AND

OF

OR N A T I O N A L

classic

interest

DOMESTIC

DO

SUPERVISORY

AMERICAN
SO

WOULD

POINT,

FOR THE S T A B I L I T Y O F O U R

S I N C E M A N Y OF TH E

a

MANAGEABLE

SOUTH
TO

WHERE

ECONOMIC

LENDING

real

LIMITATIONS

,

OF
a

of

TIME
RISK.

strong

FLUCTUATING

THE F U L L R E P A Y M E N T OF A S U B S T A N T I A L

By
TO

OTHER

COMMODITY

HAVE THREATENED

SHOULD




—

AND

THE

INSTANCES

provides

FOREIGN

PROFITABLE

FOREIGN

AMOUNT

lending

PURSUED

surprises

DOLLAR,

AMOUNT

BANKS

OF

IN

CONFLICT WITH

In t e r n a t i o n a l

DILEMMA.

COGNIZANT

PARTICULARLY

ACTION MIGHT

.

I AM

TIME,

SUPERVISION,

SUPERVISORY

THIS

SAME

H E L D BY

AND
HAVE

STANDARDS,

AFRICAN

NATIONS

IMPORTANT

FOREIGN

IT A L S O W O U L D H A V E
DOMESTIC
OUR

A

IMPORTANT

FINANCIAL SYSTEMS,

LARGEST

AND M O S T

VISIBLE

-

BANKING

DEPOSIT

NATIONAL

PREVENTING

WITH

SYSTEM

BANK

ACTUALLY

RUNS

DEPOSITS

INSTITUTIONS

An

UNDER

REGARDLESS

TO

TAKE

BANK

PORTFOLIOS

WITH

DEPOSIT

ON

RISK,

BUT

WE

BECAUSE
TEND

NOT

I CERTAINLY

DEPOSITORS
AND

OF

WAS
OF

THE

FAVOR

PLACE

INSURANCE
WITH

TH E

RECOGNIZE

IS

SCRUTINY

OF

DOING

TH E

A

THE

INSTITUTION

INCREASED
IN

AS

INTO

STAY

THE

AN D

CREATES

THIS

PUT

TO

HENCE,

I AM

OF

SPEAK

REQUIRING

E X A M P L E OF HOW

TAKING

SYSTEM

BUT

RISK.

EXAMINERS.

INSURANCE,

RISK

$100,000)

OF

MORE

BY

ENHANCES

RISK.

ANOTHER

WEALTH

INSURANCE

REDUCING

(OF

THE

ECONOMISTS,

PROBLEM:
OF

PROVIDES

PROTECTING

As

DILEMMA.

PURPOSE

TEMPTED

SYSTEM

OF

HAZARD"

THE

INSURANCE

OBJECTIVE

SUPERVISORY
"MORAL

-

INSTITUTIONS.

The
A

8

OF

AWAY

DILEMMA

IT

R A I S E S FOR B A N K S U P E R V I S I O N .

Although

supervision

PREVENTING

EXCESSIVE

AND

BE

IT M A Y

IT HAS
MUST

BEEN

SO

FROM

THAT

EXCESSIVE

PAST.

OUR

WE

CA N

is

needed

TO

AT

LEAST

also

US

be

HAS

PROBLEMS

OF T H E

PU T

BETTER

CURTAIL

THE

GLARING

remind

of

in

BALL

FUTURE

AS

T AS K,

WE

CONTROLS

INTO

INSTANCES

FRAUDULENT

bankers

CRYSTAL

IN T H E

DIFFICULTY

COURSE,

helpful

A

AND

OF
to

THE

and

OF

PREVENT

MISTAKES

AND

in

NONE

DESPITE

PAST

RISK-TAKING,

Supervision

step

RISK-TAKING,

DIFFICULT

IN T HE

LEARN

PLACE

AS

can

OF

RISK-TAKING.

the

principal

of

DIVERSIFICATION.
L et

ME

supervision



.

NO T
The

FAIL

TO

Federal

MENTION
Reserve

THE

OTHER

enforces

FUNCTIONS

various

OF

BANK

statutes

, most

9

-

OF

WHICH

ARE

DESIGNED

ACHIEVE SPECIFIC
AWARENESS

AN D

OBJECTIVES
RECEIVE

ECONOMIC

ARE

MORE
SAME

DEREGULATION.

B UT

OF

BANK

STRENGTHEN

TH E

BANKING

AND S O C I A L O B J E C T I V E S ,

PROTECTION

THE

PAR T

TO

-

OR C O M M U N I T Y

NARROW

IN

ATTENTION
TH EY

ARE

AS

FOCUS

TO

THE

LENDING,

AND
GRAND

THEY

AS

MUCH

A

DO

NOT

ISSUES

RESPONSIBILITIES

ARE

TO

THESE

HENCE

IMPORTANT

SUPERVISION.

OR

S U C H AS C O N S U M E R

DEVELOPMENT

THEIR

SYSTEM

LIKE

THAT

PART

OF

ARE
BANK

S U P E R V I S I O N AS IS THE R E V I E W OF A L OA N P O R T F O L I O .

Finally,
CENTRAL

BA NK ,

CONTRIBUTES

we

have

THE

what

LENDER

DIRECTLY

TO

actually

OF

THE

LAST

is

a

principal

RESORT.

STABILITY

OF

THE
THE

role

CREDIT

BANKING

a

FUNCTION

SYSTEM

THE E C O N O M Y BY S T A N D I N G R E A D Y TO P R O V I D E

L I Q U I D I T Y TO T H E

IN T I M E S OF C R I S I S .

OPERATIONS

BECAUSE QPEN-MARKET

of

AND

ECONOMY

HAVE REPLACED

THE D I S C O U N T W I N D O W AS T H E P R I N C I P A L M E A N S OF C O N D U C T I N G M O N E T A R Y
P OL IC Y,
TO-DAY
BANKING

HOWEVER,
BASIS

The

MAIN

ROLE

TO

HELP

INDIVIDUAL

IS

SYSTEM,

OPERATIONS
MORE

THE

THROUGH

DIRECTED

I M P O R T A N C E OF THE

YEARS WHEN
THROUGH

ACTIONS

TOO L,
TO

LENDING

BANKS

FUNCTION
AND

TO

OF

HA S B E E N
HELP

A DAY-

FUNCTION

SPECIFIC
EVIDENT

LARGE

THE

OPEN-MARKET

THE CREDIT

PROBLEMS

ON

POTENTIALLY

DIFFICULTIES.

FUNCTION

HAVE

CREDIT

WHEREAS

TH E

HAD TO BE T A K E N

CRISES THAT COULD

T HE

TEMPORARY

ARE A B R O A D- BA SE D

APPROPRIATELY

OF

BA NKS.

IN R E C E N T

AN D S M A L L

PRODUCED UNDESIRABLE

IS

SHOCKS

BANKS
TO TH E

BANKING SYSTEM.

The



new

r£ p o n s i b i l i t y

of

the

Credit

Unit

for

monitoring

10

-

P A Y M E N T S R I S K -- T H E

"DAYLIGHT

SUPERVISORY

THE

FORCES
FOR

ASPECT.

BANKS

LARGE

IF

IF T H E Y
ONLY

BANKERS

REVIEW

INTRA-DAY

INTO P L A C E
EVEN

TO

IN

NEW

FACE
OF

BE

OF

AND

CONTINUES

TH E

BETTER

TECHNOLOGIES
ALSO

MUST

THAN

MORE

RULES,

ENVIRONMENT.

DEREGULATION
RELAXATION

OF

SUPERVISION
IN

DOES
BANK

WILL

FERRETING

SUPERVISION

SHOULD
THE

BE

T HE

AND

SAME

THAT

PLAY

A

I

ITS

IMPLEMENTED
AND

CONTROLS

PUT

NEW

RISK

E X P O S U R E HERE,

UNPLEASANT
CREATE

ARE

THE

BY

ALWAYS

IN

ROLE

IN

TI M E ,

PROCEDURES

SURPRISES

TO

POTENTIAL

FOR

AM

IN

IN

AT

OF

RULES

THE

RAPIDLY

THAT

I FAVOR

ADVOCATING

FRAUD

MORE

BANKING

INTENSIVE

AR E

THE

REGULATIONS

HELPING

THE

RULES

TO
TO

A

ASIDE,
LI G H T ,
PREVENT

INSTITUTIONS.

MAKING

RESERVE'S

IN

FINANCIAL

F AC T

BRINGING

AND

CA N OR

CHANGING

NECESSARILY
AND

THAT

FEWER

LIGHT
THE

INDIVIDUAL

DIRECTED

THE

GENERAL

STATUTES

MANAGMENT,

FEDERAL

BEING

IS NOT A P R O C E S S

PARTICULARLY

POOR

RISK-TAKING

AND

TO

PRODUCTS.

SUPERVISION.

EXCESSIVE

BETTER,

NEW

ADJUST,

MEAN

ALWAYS

OUT

MARKETS

AND

At

NOT

A L S O HA S

IF NO T W A T C H E D .

U.S.

GAME

CHANGING

AND

TO

—

PROCEDURES

CAUSED

I THINK DEREGULATION

CURTAILED.

NEW

CURRENTLY

ACCOUNTING

HAS

M A J O R D I S R U P T I O N A ND L O S S E S

SHOULD

PROBLEM"

I N T E N D TO RUN O V E R D R A F T S .

PAST

TO S U M UP,

PROGRAM

TRANSFERS

POTENTIAL,

THE

OVERDRAFT

THEIR

DOLLAR

-

BANK

SYSTEM

WORK

PROGRAM

OF

S U P E R V I S I O N S H O U L D H E L P A C H I E V E TH E O B J E C T I V E S OF D E R E G U L A T I O N .

Su p e r v i s i o n
HOP E

THAT




ALL

OF

plays

YOU,

an

important

PARTICULARLY

role

THE

in

public

policy

NEW

STAFF,

KEEP

and

IN

I

MIND

-

11

-

THAT

OUR

OBJECTIVE

IS TO

ENCOURAGE

HAVE

AN

INTERESTING

AND

RESPONSIBLE

WILL

CONTINUE

TO

ENHANCE

TH E

SOUND
JOB,

FEDERAL

BANKING
AN D

PRACTICES.

I AM

SURE

RESERVE'S

THA T

YOU
YOU

IMPRESSIVE

R E P U T A T I O N FOR P R O F E S S I O N A L I S M .

Thank

you

.

I would

like

ANY Q U E S T I O N S YO U M I G H T HAVE.




to

take

this

opportunity

to

address