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A major weakness of the bill is that it does not restrict the deposits covered by federal insurance, he said. "I'm disappointed we didn't get deposit insurance reform. The system has become swollen," he said.
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A Treasury Department spokeswoman later singled out this issue and said it would committees and on the floor of the House to bring about reform.
The vote for the bill was 31 to 20. Rep. Jim Leach, one of the senior and more respected members of the committee who belongs to President Bush's political party voted against the bill. He said he believes that mixing banking with other business will lead to concentrations of power. Another problem, he said, is that too few restrictions were placed on activities of financially weak banks.
Gonzalez said he expects to be able to bring the bill before the full House in mid-July. Some observers believe that is overly optimistic because other committees in the House must consider parts of the bill and some of them are likely to be hostile to breaking down the 1930s laws.
Gonzalez said he expects to take up again in July the issue of streamlining the current state-federal regulatory system.
Following is the full text of Secretary of the Treasury Brady's statement on the committee action:
Today, the House Banking Committee voted in favor of the most sweeping bank reform since the 1930s. I applaud Chairman Gonzalez, Ranking Republican Member Wylie, Chairman Annunzio and the members of the House Banking Committee for their leadership in moving this bill expeditiously through Committee. We look forward to final action in the House and I hope the Senate will promptly begin debate on comprehensive banking reform.
The most recent estimate by FDIC Chairman Seidman is that the Bank Insurance Fund (BIF) has sufficient funds to last through the end of 1991, but will need to be recapitalized in 1992. This highlights the need for the Congress to enact comprehensive bank reform legislation this year. Comprehensive legislation is needed to assure a safe, competitive banking industry that is ready to face the 21st century.
We must revitalize our outdated banking system. Our goal should be to draw private sector capital back into the system and not risk the chance of calling on the taxpayer.
EAGLEBURGER: HUMAN RIGHTS A KEY PART OF CHINA POLICY
(Corrected version of June 27 article)
Sam Burks
USIA Staff Writer
Washington -- The promotion of fundamental human rights is and will remain a cornerstone of U.S. policy toward China, U.S. Deputy Secretary of State Lawrence Eagleburger says.
Therefore, the imposition by Congress of conditions on extending most-favored-nation (MFN) trade status to China for another year is unnecessary and would probably be counterproductive, Eagleburger emphasized in testimony June 27 before the Senate Foreign Relations Committee.
Most-favored-nation treatment, initially extended to China by President Carter in 1980, allows exports from that nation to enter the United States at the lowest tariff rates of any country, expect for certain developing countries.
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