Glass-Steagall again
By STAFF Kate Ballen, Ann Reilly Dowd, Alan Farnham, John Paul Newport Jr.

(FORTUNE Magazine) – -- Long before he became chairman of the Federal Reserve, Alan Greenspan opposed the parts of the Glass-Steagall Act that ban commercial banks from dealing in securities. So when he restated his position before Congress, no one was surprised. The Fed chairman thus adds his considerable influence to Senator William Proxmire's bill that would let banks set up units to sell stocks and bonds, but not mutual funds or insurance. Though the measure will get a friendly reception in the Senate, it faces opposition in the House. Representative John D. Dingell, chairman of the Energy and Commerce Committee, has repeatedly blocked attempts to let banks underwrite stocks and bonds because he fears that potential risks from underwriting would jeopardize the safety of the banking system. The securities industry, which does not want banks to encroach any further on its turf, is also mounting an attack. Will Glass-Steagall, which looks increasingly anachronistic as banks find ways around it, ever be repealed? Maybe sooner rather than later. As Meyer Eisenberg, former director of the University of California at Berkeley's National Center on Financial Services, says: ''There is a lot of pressure for agreement. Proxmire will be retiring this term, so the window of opportunity is narrowing.'' One way to a resolution: Banks should figure out a way to calm Dingell's doubts.