both
lenders and investors . . . and underwriters and traders of
securities . . . have an inherent conflict of interest."5
The banks have also been expanding into traditional insurance
markets, such as the sale of annuities, which the FRB permitted.
In 1993, Congress prohibited federally insured, state-chartered
banks from engaging in insurance underwriting. Secretary of the
Treasury Robert Rubin would allow banks to be allied with or to
be bought by insurance firms, but Rep. Leach's bill in the House
would continue to bar insurance companies from buying banks.
In 1927, the McFadden Act prohibited banks from establishing
branches outside their state of origin, except as permitted
under state law. In the '80s, when disaster struck in the form
of the savings and loan crisis, many states liberalize
...