BANKING & FINANCE - Nov. 8, 1993

Regulators Scrutinize Bank Trading Activity: Federal Reserve Board Chairman Alan Greenspan said the Fed and other regulators are increasingly scrutinizing the trading activities of banks in securities, options, currencies and other “derivatives” to ensure that growing volume causes no “systemic risk” to financial markets. While derivatives trading has been a profitable activity for many banks, Greenspan said their highly complex nature is causing regulators to monitor them “in a more systematic way.” Greenspan told the American Bankers Assn. convention in San Diego that banks’ trading profits totaled $8 billion over the first half of 1993, up from $1.6 billion for all of 1984.