Single bank overlord will 'damage US'

WASHINGTON (Reuter) - Alan Greenspan, the Federal Reserve Chairman, yesterday reiterated his opposition to President Clinton's plan for a single bank regulator, saying it would hurt both the economy and the Fed's ability to manage a crisis.

Giving testimony before the Senate Banking Committee, Mr Greenspan said: 'We must avoid a regulatory structure that inhibits economic growth. Removing the Federal Reserve from supervision and regulation would greatly reduce our ability to forestall financial crises and to manage a crisis once it occurs.'

Last November, the Treasury Department unveiled a proposal to merge the regulatory duties of the four existing bank agencies into a Federal Banking Commission - a plan that must be approved by Congress. The Fed's regulatory powers would be scaled back.

Mr Greenspan said there should not be 'a single monolithic federal regulator' and that every bank should have a choice of regulator. He argued that the Fed should continue to be involved.

He also made a renewed pitch for the Fed's own proposal to replace the four existing regulators with two and give the Fed control over 7,000 more banks.