Robert L. Clarke, who as comptroller of the currency is the nation's chief banking regulator, actively trades in stocks and junk bonds and has borrowed money to invest, The Washington Post reported Tuesday.
The newspaper, citing Clarke's 1991 financial disclosure form filed Monday and reports for earlier years, said the comptroller's investment practices are in contrast to the decisions of other high-ranking financial regulators who have placed their holdings in "blind" trusts to avoid potential conflicts of interest."There is no requirement for putting these investments in a blind trust," Clarke, who has been comptroller since 1985, told the Post. "I don't find anything the slightest bit unsobering in those dealings."
Clarke had no comment on the Post's story when he arrived on Capitol Hill for previously scheduled testimony on bank reform legislation. He said his office would put out a statement later Tuesday.
But Rep. Barney Frank, D-Mass., a member of the subcommittee before which Clarke testified, came to the comptroller's defense, calling the Post story "wholly unfair" to Clarke.
"I don't know how that story got on the front page," Frank told Clarke, sitting at the subcommittee's witness table with Federal Reserve Board Chairman Alan Greenspan and others. "I hope it will be given the absolute disregard it deserves."
The newspaper said that, according to Clarke's financial disclosure documents, he has in the past four years made more than 100 stock and bond trades, buying or selling a wide variety of securities.
Clarke has borrowed extensively from state banks, which he does not regulate, and in one instance used a 1988 loan to finance an investment - a loan of between $100,000 and $250,000 from a Texas bank that is regulated by his office, the Post reported.
Clarke told the newspaper that all of his activities have been approved by either ethics officials or congressional committees.
The Post said Clarke has continued to deal in high-risk junk bonds after joining the Resolution Trust Corp., which manages and sells the government's portfolio of junk bonds acquired from failed savings and loans. Clarke has bought and sold more than $1.7 million in junk bonds since becoming comptroller, the Post said.
As comptroller, Clarke potentially has access to extensive files of information the government holds about the quality of many junk bond issues.