Brokerages Want a ‘Financial Summit’

The Securities Industry Assn.’s incoming chairman Thursday urged Congress, the White House, the Federal Reserve and the Treasury to hold a summit on ways to restructure the U.S. financial system to make it sounder and more competitive.

“We need to have a financial summit,” Dale Horowitz said, adding that representatives from banks, thrifts, insurance companies, securities firms and other interested parties should be represented.

The proposal was made at the 19th annual convention of the SIA, which opened here Thursday on a grim note. In his opening speech, SIA President Edward O’Brien said: “The recession in this country makes it clear that this is a time of great uncertainty for our industry.”

The SIA, the trade group for about 600 U.S. investment banking and brokerage firms and stock exchanges, said a financial summit would seek ways to restructure the financial system to make it safer and sounder domestically, and more competitive internationally.

Key to restructuring is removing the half-century-old laws that bar most banks from risky securities underwriting activities. Both the banking and securities industry agree these laws are outdated.

Heads of congressional banking committees have said financial reform will be a priority in 1991. The Bush Administration is also committed to reform.

But the details on how to achieve reforms divide the banking and securities camps.

Horowitz said a financial summit would be an attempt to bridge that gap. Without it, he fears that Congress will not tackle financial restructuring and concentrate instead on the narrow issue of reforming the ailing bank deposit insurance system.