Wall Streeters Endorse Plan to Let Banks Sell Securities

Wall Street leaders declared an end on Friday to their lengthy battle to keep banks out of the stocks and bonds business, proposing to junk the law that has governed the nation’s basic banking structure since the Depression.

Directors of the Securities Industry Assn., at the trade group’s annual convention here, endorsed a proposal for new legislation to let subsidiaries of banks “engage in a broad range of securities and securities-related activities.”

At the same time, the SIA said its plan would let brokers engage in consumer banking businesses and join banks in having access to the Federal Reserve’s banking system, including the right to borrow from the Fed in emergencies.

The move appears to herald one of the biggest breaks yet in the gradually crumbling wall separating banking and brokerage activities, erected by the Glass-Steagall Act of 1933 amid the financial crisis that followed the stock market crash four years earlier.

The barrier has been weakened chink by chink in recent years, with the move toward financial deregulation.