NEW YORK, Jan. 15 /PRNewswire/ -- David H. Komansky, Chairman and Chief
Executive Officer of Merrill Lynch & Co., Inc., today urged Congress to "bring
our financial laws into the next century" by enacting financial services
modernization legislation that was re-introduced in the House of
Representatives last week.
In a speech to the American Council of Life Insurance in Naples, FL, Mr.
Komansky said the time is ripe for Congress to adopt The Financial Services
Act, also known as H.R. 10. The proposed legislation would end the outdated
and anti-competitive division of financial services -- securities, insurance
and banking -- imposed by the Glass-Steagall Act of 1933.
"We're now the only developed country in the world that hasn't lifted the
barriers separating commercial banking, securities and insurance," Mr.
Komansky said. "Decisions made in Washington in the weeks and months ahead
will play a key role in determining America's position in this new global
financial marketplace."
Mr. Komansky is one of over 70 chief executives from the financial
services industry who argue that the Depression-era legislation is woefully
outdated, and that reform is necessary to modernize the industry and provide
clients with "one-stop" shopping for their securities, banking and insurance
needs. The legislation would allow U.S. firms to compete more effectively
against European and Japanese "universal banks," and help institutions become
more diverse, stronger and better able to withstand turbulence in the global
markets. The legislation would also result in greater convenience and more
innovative products for customers at a lower cost. Treasury Secretary Robert
Rubin estimates that financial reform would save U.S. families more than
$15 billion annually.
"Financial services reform will benefit not only our industry, it will
benefit every American who owns a mutual fund, or has purchased an annuity or
wants a checking account with a good interest rate. It will help everyone who
carries a credit card, holds an insurance policy or invests in a 401(k) plan,"
Mr. Komansky said. "If we, in a very competitive industry, can push aside our
parochial interests and achieve consensus for the good of all, surely the
agencies of our government can do no less."
In the rapidly consolidating financial services industry, H.R. 10 would
streamline an inconsistent regulatory structure now governing securities
firms, banks, and insurance companies. For example, commercial banks may
purchase securities and insurance companies, but securities and insurance
companies are legally prohibited from buying banks.
Last year, the House approved H.R. 10 and the Senate Banking Committee
voted a bill out of committee, but the session expired before action could be
completed. This year, proponents of financial services reform began working
early with House Banking Committee Chairman Jim Leach (R-Iowa) and new Senate
Banking Chairman Phil Gramm (R-Texas) to resolve remaining concerns about some
provisions and ensure passage this year. A recent National Journal survey
found that a majority of Congressional staff believes that financial services
reform will be enacted during this session.
"The consensus is that the core issues are so important that none of the
remaining issues are unresolvable," Mr. Komansky said. "If we don't reform
our (financial services) laws, there will be a price to pay in American
economic leadership. The world's financial system is now being reordered for
the next 25 years. Our choice is to lead, follow or get out of the way. I
think we should lead."
Merrill Lynch is one of the world's leading financial management and
advisory companies with offices in more than 45 countries and total client
assets of approximately $1.4 trillion. As an investment bank, it is the top
global underwriter and market maker of debt and equity securities and a
leading strategic advisor to corporations, governments, institutions, and
individuals worldwide. Through Merrill Lynch Asset Management and Merrill
Lynch Mercury Asset Management, wholly owned subsidies, the company is one of
the world's largest managers of financial assets.
SOURCE Merrill Lynch & Co., Inc.
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