Fed Loosens the Rules on Securities Units

The Federal Reserve Board’s Board of Governors voted to knock down some of the walls that separate banks from securities affiliates, allowing institutions greater freedom to market and develop investment products. The Fed voted to remove restrictions on banks’ marketing brokerage services and allow loan officers and investment bankers to work together. The new rules also allow banks and thrifts to buy and sell more securities underwritten by their affiliates. The Fed’s action is part of a larger effort to enhance the banking industry’s securities powers. But the Securities Industry Assn. criticized the action, saying only Congress should decide what new securities powers banks should be allowed to have.