	fed s heller urges broad reform to aid banking federal reserve board governor robert heller said the banking system could be strengthened by permitting formation of financial services holding companies involved in areas like banking insurance real estate and securities in a speech prepared for delivery in new york to the bank and financial analysts association heller said i believe that increased diversification along geographic and product lines is the key to strengthening the american banking system he said he supported the idea of financial services holding companies advocated by the association of bank holding companies in which regulation of various bank thrift insurance investment securities and real estate subsidiaries would be handled on functional lines limits would be placed on the extension of credit by the bank to the associated institutions and all transactions would have to be on an arms length basis heller said measures would be necessary to avoid abuse of the banks special position by such holding companies or subsidiaries heller said he would require the holding company to serve as a source of strength to the bank by making a commitment to maintain the bank s capital in other words the bank would not be allowed to fail as long as the holding company has a positive net worth heller also said commercial enterprises should be permitted to own a financial services holding company again with the provision that capital would flow to the financial enterprise if necessary heller said the effects of these actions would be banks that are at least as strong as the corporations holding them in which customer deposits were assured while any incentive to loot the bank was removed such diversification would give access to national and international financial services to corporations across the united states heller said that would mean the steady decline of america s banks in the world financial league tables would be arrested by permitting them to become more competitive reuter 
