Securities Group to Sue Over Banks’ New Role
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NEW YORK — In its latest move to protect its turf, a securities industry trade group said Friday that it will sue the Federal Reserve Board to prevent affiliates of bank holding companies from underwriting corporate stock and bonds.
Last month the Fed said it would allow bank affiliates to underwrite corporate bonds, eroding the strict division between the banking and securities industries laid out in the Glass-Steagall Act of 1933.
The Securities Industry Assn. said it would try to convince the courts that the Fed overreached its authority in letting bank affiliates underwrite corporate bonds. The SIA is a trade group made up of firms that underwrite and trade fixed-income securities and stock.
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