If banks are allowed to run securities firms under new federal regulations, then securities firms should be allowed to own banks, Securities and Exchange Commission Chairman Richard Breeden said.
"That shouldn't be a one-way street," said Breeden, who strongly favors the Treasury Department proposals that would let banks become brokers, selling securities, mutual funds and insurance.Breeden's main concern is a commitment to capital standards rather than questions about the corporate parentage of the operations. But he said bankers shouldn't be the only ones who get to break down regulatory barriers that have kept the financial businesses separated.
Breeden, a key player in the Bush administration's thrift bailout strategy, said he would like to see "the roadblocks fall in both directions simultaneously."
"There's just too little difference any more between many of the products," he said.
His only caveat on backing reform legislation is that he hasn't seen anything firm in writing "and the devil is in the details," Breeder told a Fordham University law school forum.
Any plan that is eventually put forth seems certain to spur a fight in Congress.
A member of the Senate Banking Committee, Christopher Dodd, D-Conn., wants to allow banks to compete with brokerage firms and insurance companies in financial services. But House Banking Committee chief Henry Gonzalez, D-Texas, has introduced a bill that would bar banks from new lines of business.
On other subjects, Breeden said he supports plans to shrink deposit insurance programs, which have "grown vastly beyond the purpose that originally was intended."
"I would not abolish deposit insurance, though I know some people would start all over again," said Breeden, who has been SEC chairman for 16 months. "I think we have much too much of it."
He provided no specifics on how he would like to see the insurance program changed.