CAN B-10-5 FOR THE BANKS - THE EFFECT OF AN ANTIFRAUD RULE ON THE REGULATION OF BANKS

In this Article, Professor Malloy explores the effects of the federal securities antifraud rule on the regulation of banks. In particular, h e focuses on the changes in regulation of commercial bank trust depart ment activities that followed the revelations in Texas Gulf Sulphur of alleged tipping between the commercial and trust departments of a maj or New York bank. He also argues that federal bank regulatory policy h as now turned away from disclosure-oriented regulation in favor of cap ital supervision, and that this may be a mistaken approach to the regu lation of banking.