Show Lj) and Down tlie Street Financial Markets jittery Following Bush Victory al)c Despite New Laws Sutton Says Salti’akf Banking Needs Big Reforms Sribnnc By Robert H Woody Tribune Buuneis Editor It goes without laying There has been as much financial institution agitation and legislation since 1980 as there has been in the previous 50 years Look at the annual report of the Utah Commissioner of Financial Institutions A brief list of key events under Department History'' indicates almost as much critical legislation in this decade — beginning w ith Senate Bill 134 — as occurred since statehood That bill recodified financial tn 4itutions The most recent legislation of note was in 1975 when the — ugh — Utah Industrial Loan Guaranty Act was passed It was to slumber until July 31 1986 when the depository fund" which the act imposed to be created was found to be woefully deficient In his report Utah Financial Institutions Commissioner George Sutton sees fiscal year 1987-198as having produced good results “In response to a stabilizing trend in the Utah economy most depository institutions in Utah reported improvement in their general financial condition Mr Sutton formerly deputy commissioner succeeded Elaine B Weis in 3987 Ms Weis who just after seating in 1982 was subjected to a baptism by fire that began with the dosing of Murray First Thrift It was as if a Pandora s Box had been opened For thei e emerged one tortured crisis after another involving bank savings and loan industrial loan credit union No other commissioner save possibly W H Handlock who served from 1929 to 1932 J A Malia who sened from 1932 to 1935 and R F Starley who sened to 1945 may have been in such a hot seat There u going to have to be foinn-dablreform nationally and locally if banks are to survive For the banks bound as they are by the provisions of the Glas Steagal Act of 1933 — which divided and prescribed the dominions of banking securities and insurance — are now seeing much of their bunnes go to the latter Historically the bread and butter of the major money center banks was commercial lending However last year in New York for the first time more than half of the funds business raised came not from the banks but just-issue- Thursday November But by late last year Mr Sutton was able to say sariguinelv that duryear there ing the remainder of the would be few if any ‘ Friday night we affectionately massacres came to refer to those late summons to be at a press conference wherein details of the salvage of one failed institution by a stronger would be dsclosed with assurance to depositors that it would be business as usual on Monday morning Only three distressful situations within the pasr fiscal year Rocky closed Aug Mountain State Ban 28 1987 was assumed by Citibank of Utah Basin State Bank closed Feb 12 and Sandy State Bank dosed May 27 were both assumed by Zions First National Bank and Utah Energy Credit Union closed Jan 26 was assumed by Utah Cential Credit Union By fiscal year s end June 30 commercial bank assets stood at $10 16 billion down from $10 5 billion the year before Savings and loans assets were up to $7 27 billion from $6 4 billion the y ear bef ore Credit unions were at $1 94 billion compared to $1 8 billion at the same time a year ago Industrial loans were $550 million compared to $424 million the y ear before Total financial institutions assets stood at $19 9 billion up from $19 billion the year before — a gam of 4 7 percent But that doesn t mean the financial institutions are out of the woods Mr Sutton told The Tribune Wednesday 'as Pressure Builds In Bid to Buy Pillsbury Bv Christina Reuter News Agency NEW YORK — Grand Metropolitan Pic strengthened its hand in its takeover quest for Pillsbury Co Wednesday announcing that 74 3 Toh-Panti- compercent of the consumer-good- s pany's shares had been tendered to it as of Tuesday night Grand Met also said that it will extend its offer until Monday The bid worth 15 23 billion had been set to expire Tuesday at midnight Wall Street analysts and arbitragers said Pillsbury may be forced to the negotiating table bv the strong showing for Grand Met “I think the tender results have put more pressure on Pillsbury s board “ said an arbitrager But Pillsbury s poison pill defense plan is still in motion and Grand Met a British hotel and liquor conglomerate baid the legal issue must b resolved before it actually takes up the shares Pillsbury in hopes of thwarting Grand Met said Monday that it d would spin off its Burger King restaurant but ana'ysts and Burger King s own franchise operators gave the proposal a lukewarm response 1988 10 Section D dent and Page9 Zions to Lend Hand To through issue of securities Further many American businesses are turning to European and Asian banks which are able to provide a variety of complementary business services which American banks are prohibited from offering Loss of a sound commercial lending base has forced American banks to look for riskier borrowers and further may have contributed to the unfortunate loans to less develojed countries Mr Sutton said Twenty years ago six of the 10 biggest banks in the world as measured by deposits were American banks Now seven of the top ten are Japanese banks and the biggest American bank is now 17th on the list Large American corporations now borrow $4 from foreign banks for every $10 borrowed from an American bank The election produced some good results says Mr Sutton in that Fernand St Germain D-- I the obstructionist chairman of the House Banking committee was defeated under an ethical cloud and could be succeeded in the chairmanship by the more enlightened Rep Douglas a Barnard Sen John D Dingell may be the choice to fill the Senate Banking chairmanship being vacated by the retiring Sen William Prox-mir- e If Sen Dingell is as y et unplumbed there is always the stalwart Sen Jake Gam former chairman who sits yet on the committee There wl be more on banking Thursday at the annual banking seminar of the College of Business at the Utah State University when speakers will course over a variety of subjects ‘ including one hot topic Hope for " Financial Institutions Beleaguered The speaker William Gibson president of the American Federal Bank of Dallas represents that community which has been particularly savaged by financial institutions stress with the recent mega-billiodollar demise of First RepublicBank Corp George Sutton Notes Improvement -- Entrepreneurs First National Bank will soon open a Small Business and Entrepreneurial Department and hat Zions hired Moon R Kent director of the Salt Lake District office of the U S Small Business Administration to manage it The announcement was made by Zions Bancor-poratio- n board Chairman Roy W Simmons Mr Moon who also is chief exec utive officer for Zions Bank Mr Moon who will serve as senior vice president and manager is scheduled to start his new job Nov 21 Zions' new Small Business and En- will provide capital made available specifi- trepreneurial Department cally to Utah s small-busines- selling small-busines- government-guarantee- d said that a weak dollar in foreign exchange helped drag down stotk and bond prices Other factors affecting the markets he said intluded this week's $80 billion quarterly Treasury auction and concerns over whether the federal Reserve might be quietly tightening credit ' It s hard to disentangle all those things " agreed Maury Harris chief economist for PaineWebber Inc The dollar initially rallied overseas after Bushs victory but it reversed course quickly largely on profit taking and investor nervousness It continued to weaken in domestic trading despite reports of central bank intervention The dollar dropped to three-montlows against the West German mark the British pound and the Dutch guilder in Europe and to a five month low against the Japanese yen The dollar selloff intensified following comments from Martin Feld-steiformer head of Reagan s Council of Economic Advisers and an adviser to Bush He said the US currency should drop at least 20 percent in the v alue over the next three years to help reduce the trade gap A cheaper dollar makes U S export more attractive in foreign markets In London the Financial Times-Stcx- k index fell Exchange 14 9 points to dose at 1 825 7 But in Nikkei Stock Tokyo the Average gained 205 51 points or to end trading at 0 73 percent h 100-shar- 225-issu- 21278 28 Stock and bond prices had edged higher and the dollar rose against major foreign currencies in the United States on Tuesday partly because of confidence Bush would defeat Democrat Michael Dukakis and continue the Reagan administration s economic policies 3 s CDRATES2THOFRSJ Fidelity Makes CDs Easy d loans and provide a s Dernocratic-controlle- Congress would work together to trim the deficits among other things ' 1 look at it as basic economic reality vs political constraints" said Robert A Brusca chief financial economist for Nikko Securities Co International ' Bush has said there so that would be no tax increase will mean budget cuts The impasse will be over where to cut " On Wall Street the Dow Jones average of 30 industrials dropped 9 25 to 2 118 24 recovering some lost ground in the final 90 minutes of trading The closely watched index reached its lowest point at when it was down about 20 points It had advanced 2 85 jxnnts on Election Day The broader market also declined with losing issues outpacing winning issues by a margin Interest rates moved up as bond prices declined The yield on the r issue Treasury’s bellwether hovered around 9 percent for the first time in more than a month while its price fell about $5 jer SHort term $1 000 face amount rates also were up slightly Edward Yardern chief economist for Prudential Bathe Securities Inc owners for growth and expansion Specifically the department will capital provide short- - and long-terto Utah small business enhance capital transfer from major financial markets into 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