NR 98-76
July 24, 1998
                                     
                  OCC Expresses Concerns About Changing 
                Derivatives Activity Regulatory Structure
                                     
WASHINGTON, D.C. -- The Office of the Comptroller of the
Currency told a House banking panel today that it does "not
see a need for significant changes to the regulation of
derivatives markets."  

The concept release recently issued by the Commodity Futures
Trading Commission (CFTC) "invites uncertainty regarding the
legal status of certain derivatives transactions", said Mike
Brosnan, Deputy Comptroller for Risk Evaluation.

"If such a change in the regulatory regime were to take
place, it might well have the effect of driving derivatives
transactions outside the United States and diminishing the
competitiveness of U.S. banks while lessening the influence
of U.S. regulatory supervision -- clearly an undesirable
outcome," Mr. Brosnan said.

Testifying before the House Banking and Financial Services
Committee, Mr. Brosnan said that the far reaching changes
proposed by the CFTC "should not be undertaken lightly."  The
OCC believes that the President's Working Group on Financial
Markets, a multi-agency body that includes the OCC, Treasury
Department, Federal Reserve Board, Securities and Exchange
Commission and other federal agencies, is the appropriate
forum for the discussion of the CFTC proposal, which cuts
across markets and regulatory jurisdictions.

Mr. Brosnan testified that the OCC has worked to create "a
consistent, predictable, and responsive environment in which
banks can operate without excessive regulatory burden and
which is conducive to the safety and soundness of the banking
system."  As of March 31, the notional amount of derivatives
activities at the 451 commercial banks that have these
contracts stood at $26 trillion.
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The OCC charters, regulates and examines approximately 2,600 national banks and
62 federal branches and agencies of foreign banks in the United States,
accounting for 58 percent of the nation's banking assets.  Its mission is to
ensure a safe, sound and competitive national banking system that supports the
citizens, communities and economy of the United States.