Now the Hard Work Begins

With the FSLIC crisis behind him, the chairman of the Senate Banking Committee turns to other matters-including bank new powers-and issues bankers a challenge Two weeks into his new job chairman of the Senate Banking Committee, Don Riegle got handed the biggest financial hot potato in more than 50 years-the President's plan to rescue the sinking savings loan association insurance fund. Drawing on his 22 years of congres- Ask Don Riegle a question about banking issue two thin s become apparent. One is that the chairman of the Senate Banking Committee is well versed on issues ranging from the need for new products services to the Community Reinvestment Act. other is that he views such issues from within the context of a larger concern. Riegle is quite worried that the combined effect of numerous trends-including the national trade deficit, the federal budget deficit, more-will put the nation in a financial straitjacket. He believes business leaders of all fields should be equally concerned about this, but singles banks out for special attention. The banking industry is one of the most important parts of our national economy, says Riegle, senior senator from Michigan. Banks, he believes, enjoy a unique position in American business. They have access to the Federal Reserve's credit apparatus, while also playing a major part in implementation of monetary policy. Banks play a major role in the payments system. They enjoy the ability to take in a large portion of the nation's federally insured deposits. They pay for deposit insurance, sional experience, Riegle cleared the decks of virtually all other business, got permission to beef up the committee's staff, decided that the rescue package was going to be a bipartisan effort involving all members of his committee. When the Financial Institutions Reform, Recovery Enforcement Act Riegle acknowledges, but as we've just seen in the S&L situation, if it turns out that they haven't paid enough, then everybody else is invited to pay. All of this should bear a price, in Riegle's eyes. There is a very important set of societal responsibilities obligations that go with being in banking, he says, and that's one of the reasons it is such a carefully regulated industry. Bankers-and other business leaders, for that matter-must think in terms of what is good for the public interest, according to Riegle. senator acknowledges that many bankers he emerged several months later, Riegle got high marks for his part in shaping the monumental bill. With the crisis dealt with, ABA Banking Journal sought an interview with the new chairman to find out his plans for the committee his opinions on banking issues. knows from Michigan have this outlook. This doesn't mean that you make unwise imprudent financial deci- sions, he continues, or that you harm your shareholders squander the resources of the business. In the end I think we're going to have a sounder, stronger banking system if the country is doing well. Macroeconomic man. 51-year-old Democrat is a congressional veteran having served ten years in the House before his election to the Senate in 1976. broader view he brings to banking issues is not surprising given that Riegle has the distinction of sitting on the Senate's three major economic committees-Finance, get, Banking. He also likes to point out that he has an MBA in finance economics is a believer in free enterprise. Many of the matters Riegle has slated for the banking committee's calendar are ones you'd expect-hearings on problems at the Department of Housing Urban Development, third-world debt, the early work of the Resolution Trust Corp., the health of the banking system. But the chairman says he also intends the committee to study the broad economic financial trendlines that the United States is riding into the future. …