GREENSPAN SUPPORTS BANKING REFORMS

Fed Chairman Alan Greenspan endorsed plans to let banks expand their dealings in Wall Street securities. Testifying to the House Banking Committee today, Greenspan said limited stock and bond dealings by banks so far have proven they can properly manage market risks without endangering federally insured deposits. Greenspan praised committee chairman Jim Leach's (R-Iowa) plan to repeal major provisions of the Depression-era Glass Steagall Act, which bans banks from dealing in securities. Some banks have used a loophole to engage in limited securities underwriting since the late1980s. Leach, the Clinton Administration and Sen. Alfonse D'Amato (R-N.Y.) have put together somewhat similar proposals to reform banking regulations. Greenspan did not address the Clinton plan, but said he opposes D'Amato's proposal to let banks merge with commercial and industrial firms. TIME Washington correspondent Suneel Ratan is skeptical about prospects for any banking reforms this year. "They have rolled this rock up the hill every two years and nothing ever happens," says Ratan.