oversight

Banking and Commerce

Published by the Government Accountability Office on 1997-06-10.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States
General Accounting Office
Washington, D.C. 20548

Office of the Chief Economist

B-277357


June IO, 1997

The Honorable Richard H. Baker
Chairman, Subcommittee on
Capital Markets, Securities and
Government-Sponsored Enterprises

Dear Mr. Chairman:

This letter includes our responses to the questions attached to your May 16th letter
concerning the issue of mixing banking and commerce. We hope you find these
answers responsive to your questions. If you have any additional questions or
wish further clarification, please call me on (202) 5 12-6209.

SincereIy yours,

             JGw%w
    es L. Bothwell
Chief Economist

Enclosures




                                            GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                          ENCLOSURE I

1.     The March 17th GAO report you wrote states that there is no
       “empirical support” for the benefits of eliminating the separation
       between banking and commerce, but says nothing about empirical
       support for maintaining those limits. In your literature search, did you
       find any empirical support--other than your own publications, which
       deal almost entirely with the failures of the regulators--for maintaining
       the separation of banking and commerce?

In the literature that we reviewed, we found no mention of any economic
efficiencies that are unique to maintaining the separation of banking and
commerce. However, we found frequent references in the literature to the
Iikelihood that maintaining the existing separation could be beneficial because it
would mean less risk to the safety and soundness of insured depository institutions
and to the financial system. Because of the existing separation of banking and
commerce in the United States, the best empirical U.S. evidence that demonstrates
the significance of such risks is found in the history of the Savings and Loan crisis
of the 1980s. As stated in the report of the National Commission on Financial
Institution Reform, Recovery and Enforcement, which was the congressionally
sponsored commission charged with examining the evidence about the origins and
causes of the crisis:

       “During the early 198Os, the S&L industry was swept up in a movement to
       deregulate American business. But “deregulating” S&Ls was not like that
       of, say, airlines or trucking in which power was given to market forces in
       the interest of economic efficiency. In the case of S&Ls, the process was
       not balanced. The industry obtained substantial new investment powers,
       and it was subjected to less supervision; but government-backed deposit
       insurance was retained and even increased. Shielded from the market
       discipline of depositors at risk, and with strong incentives to enter risky
       new areas, the industry was doomed and the insurance system set on a
       course that would involve huge claims on it.
            The S&Ls’ asset and liability powers were expanded sharply, and they
       were allowed to move rapidly into risky new areas of business in which
       they lacked expertise. . .. New policies allowed entry into the industry of
       individuals with serious conflicts of interest. These government policies
       created powerful incentives and opportunities for insolvent and weakly
       capitalized S&Ls to use insured deposits to grow rapidly and engage in
        speculative, imprudent, and sometimes fraudulent activities.“’



 ‘National Commission on Financial Institution Reform, Recovery and Enforcement,
 Origins and Causes of the S&L Debacle: A Bluenrint for Reform (Washington,

 1                                             GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                            ENCLOSURE I

In addition to this U.S. experience, industry analysts have pointed out that some
countries that have permitted the mixing of banking and commerce to a greater
degree than does the United States, have been reconsidering their policies and, in
some cases, have recently taken actions to impose greater separation to limit risks.
Further, it is important to note that some of the risks we identified, such as the risk
associated with an increased concentration of economic power, may not arise until
the industry has achieved a greater degree of consolidation--which may occur if
current trends continue.

2.     Please furnish a bibliography or other list of the works or articles you
       consulted in your literature search or in the preparation of your report.

A bibliography is attached as enclosure II. Please note that some of the articles
listed in the bibliography are reviews of the literature and reference more articles
than are listed in our bibliography.

3.     You state that there is a danger that the safety net will be extended to
       the commercial affiliates of banks. However, Chairman Greenspan has
       testified that the holding company structure prevents this from
       occurring. Do you disagree with him, and why?

In his May 22 statement before the House Banking Committee, Chairman
Greenspan stated that “H. R. 10 would continue the holding company framework
for nonbank activities, which the Board believes is important to limit the direct risk
of new financial activities to banks and the safety net” [italics added]. We agree
with Chairman Greenspan and the Board of Governors of the Federal Reserve
System that the holding company framework limits, but does not necessarily
prevent, the risk of new financial activities to banks and the safety net.

4.     Banks are permitted to affiliate with mortgage banking companies,
       leasing companies, and securities firms under current law. Why don’t
       these firms pose the same problem of expanding the safety net as
       commercial firms?

Bank affiliations with mortgage banking firms, leasing companies, and securities
firms do expand the federal safety net to some degree, and various statutory and
regulatory firewalls and limits currently exist to reduce the risks posed by such
activities to the safety net. In addition, the Federal Reserve has regulatory
authority over these bank affiliates through the bank holding company structure.



DC.: July 1993), p. 2.

2                                             GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                        ENCLOSURE I

Specifically, banks are permitted by the Board of Governors to affiliate with these
types of holding company subsidiaries where the Board determines that the
subsidiary’s activity satisfies the requirements of section 4(c)(8) of the Bank
Holding Company Act; i.e., that, among other things, the activity is properly
incident to banking or managing or controlling banks and the public benefits of the
activity can be expected to outweigh possible adverse effects. Among other things,
such affiliates and their holding companies are subject to examination by the Board
and must comply with applicable Board regulations. In addition, the Board has
authority to require termination of the activity or divestiture of the subsidiary.

5.     Your report does not mention the role of Sections 23A and 23B of the
       Federal Reserve Act in preventing banks from providing financial
       assistance to their commercial affiliates. Why aren’t these sections
       sufficient protection against the misuse of bank funds?

Sections 23A and 23B may or may not be sufficient protection against the misuse
of bank funds. We know from our work on insider lending that an activity
deemed illegal or improper may not be detected? Further, we know from our
work on implementation of the prompt corrective action provisions of the Federal
Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) that even when
violations are detected, effective action may not be forthcoming by the regulator--
either to ensure that the bank corrects the problem or to begin enforcement action.3
In part, this can arise because examiners may not be sufficiently trained in certain
areas. For example, determining whether transactions were conducted according to
arm’s-len,ti standards can be a difficult process and may require both technical
skills and experience that take time to develop. Examiners also need to learn how
to detect issues that arise across affiliates, which may change as the type of
affiliation changes. This was one of a set of reasons why the Federal Reserve put
into place a comprehensive set of firewalls to govern the activities of Section 20
securities affiliates. They knew that their examiners needed time to learn about the
interaction of securities underwriting activities and banking. During that learning
period, stricter limits and even bans on certain activities were deemed necessary.




*Bank Insider Activities: Insider Problems and Violations Indicate Broader
Management Deficiencies (GAO/GGD-94-88, Mar. 30, 1994).

3Bank and Thrift Rermlation: Imnlementation of FDICIA’s Promnt Regulatory
Action Provisions (GAO/GGD-97-18, Nov. 21, 1996).

3                                            GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                             ENCLOSURE I

6.      The Fed has recently determined to eliminate most of the firewalls
        between banks and affiliated Section 20 companies, and to rely on
        Sections 23A and 23B. If the Fed thinks these sections are sufficient
        protection, why don’t you?

 The Federal Reserve has suggested that certain regulatory firewalls may no longer
 be necessary, at least in part due to the presence of the firewall provisions
 contained in Sections 23A and 23B of the Federal Reserve Act. However, the
 Federal Reserve, in its request for comments on its proposal, asked for guidance on
 whether the firewalls in Sections 23A and 23B are sufficient in a number of
 particular instances. For example, the proposal contains a discussion of the
 firewall that prevents a parent or non-Section 20 affiliate from extending credit
 directly or indirectly secured by or for the purpose of purchasing any ineligible
 security that the Section 20 affiliate underwrites during the underwriting period or
 for 30 days thereafter; or to purchase from the Section 20 affiliate any ineligible
 security in which it makes a market. As part of that discussion, the Federal
 Reserve stated that this type of situation represents the most fundamental potential
 conflict between banking and securities underwriting and that it wanted
 commenters to assure it that Sections 23A and 23B, along with the Securities
Exchange Act, would provide sufficient protection. These proposed changes
 appear to be based on the Federal Reserve’s belief that it may have had sufficient
 experience with Section 20 affiliates to allow it to move to this less restrictive
 mode. In our work on Section 20 affiliates, we found that the Federal Reserve did
 a reasonably thorough job of checking compliance with firewalls. However, the
 approach the Federal Reserve is taking is clearly in the nature of an experiment.
The Federal Reserve is making a judgment that Sections 23A and 23B, along with
other regulatory guidance and changes in the operating rules for Section 20
 affiliates, will provide a sufficient level of protection against potential conflicts of
interest or the spread of any deposit insurance subsidy. Only time will tell if that
judgment was well founded.

7.     If you mean by “conflicts of interest*’ that commercial firms will cause
       banks to make imprudent loans to their affiliates, have you taken
       account of the restrictions in Sections 23A and 23B?

As we stated in our answer to question 5, it can be very difficult to determine
whether a loan was made or credit extended in accordance with arm’s ler@h
standards. Without examining loan files in great detail, it may not be possible to
determine whether the interest rate or repayment terms properly reflect the degree
of risk involved in the extension of credit. Periodic examinations or inspections
cannot detect all potential issues, and our experience shows that, even when
problems are detected, they may not be raised either to bank management or to


4                                               GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                            ENCLOSURE I

supervisory officials. In addition, when examiners do raise concerns, their
supervisors may or may not be willing to require corrective actions. Our recent
report on regulatory implementation of the prompt corrective action provisions of
FDICIA found that, although bank regulators were complying with the capital
tripwires provisions, it was not clear that they were acting quickly enough to
correct problems before they reduced bank capital.

8.       If you mean that commercial firms will cause their affiliated banks not
         to lend to competitors of the commercial affiliates, have you considered
         that there is no shortage of credit in today’s economy--and that, if one
         bank won’t lend, many other banks (as well as commercial finance
         companies and leasing companies) would be happy to do so?

While    currently there does not appear to be any general shortage of available credit
in the   economy, our concern is with the potential difficulties that might arise if
banks    and commercial firms were allowed to merge, or that might exist in the
future   if current trends toward consolidation continue.

9.       If you are suggesting that banks and their managements will violate the
         law in order to make these loans at the direction of their affiliated
         commercial firms, are you aware of the severe penalties (up to $1
         million per day in some cases) that may be imposed personally on the
         directors and officers of banks that violate the banking laws, or of the
         regulations or orders of bank regulators?

While firewalls and sanctions provide some level of protection against improper
transactions, our work has shown that firewalls may not work in times of stress, or
where managers are determined to evade them, and that violations have occurred
despite the potential for enforcement actions and substantial penalties. For
example, in our report on insider activities,4 we reviewed Federal Deposit
Insurance Corporation (FDIC) investigations of 286 bank failures that occurred in
calendar years 1990 and 1991. We found that investigators cited evidence of
insider problems, such as fraud or losses on loans to insiders, in 175, or 61
percent, of the failed banks. We also found that enforcement actions were
generally not forceful or timely enough to prevent the problems cited from
contributing to bank failures, and few sanctions, including civil money penalties,
were imposed. However, the authority to impose such sanctions was known to




4Bank Insider Activities: Insider Problems and Violations Indicate Broader
Management Deficiencies (GAO/GGD-94-88, Mar. 30, 1994).

5                                                GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                          ENCLOSURE I

 bankers and may have contributed to some banks adopting a policy prohibiting
any insider lending.

10.    Would affiliation with a commercial firm pose a greater risk of
       “contagion” than affiliation with a leasing company, mortgage banking
       firm, or securities firm--all of which are permitted under current law?

The risk of contagion effects potentially applies to all affiliates of a financial
services holding company. Thus, financial services holding companies should be
regulated on a consolidated, comprehensive basis, with appropriate firewall
provisions to protect both consumers and taxpayers against possible conflicts of
interest and to prevent the spread of the federal safety net provided to banks, and
any associated subsidy, to nonbanking activities. If the current separation between
banking related activities and commerce were eliminated, having such an umbrella
supervisory authority would thus imply an extension of some regulatory
supervision to commercial firms.

11.    Do you have any examples of contagion--in which a bank failed because
       of affiliation with a commercial firm?

We are unaware of any such examples in the United States in recent decades, in
part, because of the current separation of banking and commerce. The concern is
that contagion risks could arise if the current separation were relaxed or
eliminated.

12.    During the thrift crisis, S&Ls that were known to be themselves
       insolvent remained open and d&Pingbusiness. Presumably, this was
       because the public believed that their deposits were insured. What
       makes you think that there would be a run on a bank because one of
       its affiliates was in financial difficulty?

The existence of deposit insurance reduces, but does not eliminate, the likelihood
of a run on the deposits of a bank. Even holders of insured deposits may attempt
to withdraw their funds from a bank they believe might soon fail, just to ensure
ready access to their funds. Holders of uninsured deposits have even more
incentive to withdraw their funds if a bank is perceived as being in trouble. In
1991, 2.6 percent of all deposits held by banks at time of failure were uninsured.
During the period approaching the time of failure, it is likely that a significantly
larger percentage of deposits were uninsured and subsequcz-ily withdrawn. In
addition, recent legislative changes have subjected uninsured deposits to greater
risk. Specifically, uninsured deposits in a sound bank that is affiliated with a
failed bank are now at greater risk because of the cross-guarantee provision--which


6                                             GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                          ENCLOSURE I

could be executed by FDIC during resolution of the failed bank. This provision of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 allows
FDIC to offset potential losses to the insurance fund by assessing the commonly
controlled institutions for the expected losses suffered by FDIC.’ The cross-
guarantee provision was imposed by FDIC in two notable bank failures--Bank of
New England, and First City Bancorporation of Texas.6 In addition, although
uninsured deposits often were effectively extended coverage in the past, the least-
cost resolution provisions contained in FDICIA allow FDIC much less discretion in
providing protection for uninsured depositors. Our work has shown, in fact, that,
during 1992, FDIC more frequently chose resolution methods that resulted in
uninsured depositors experiencing some losses.

13.    Unless a bank has economic power, how can it add economic power to
       a conglomerate ? In today’s highly competitive financial economy--
       where banks are losing market share year after year--how can any
       bank be said to have market power?

According to some analysts, it is unclear that U.S. banks have been losing ground
in terms of a relevant measure of market share. Although aggregated balance sheet
data show that the banking sector’s share of overall assets of U.S. financial
intermediaries has declined since 1980, other changes in the marketplace, including
the growth of credit related activities that do not appear on balance sheets, may
have an offsetting effect on the banking industry’s position in the overall U.S.
credit market.7

Nonetheless, by combining, banks can attain a greater degree of market power than
they would attain without combining. In addition, there may be specific situations,
such as in the provision of banking services to rural areas or inner cities, or in the
provision of certain unique services, where some banks might achieve some degree


‘See 1992 Bank Resolutions: FDIC Chose Methods Determined Least Costlv. but
Needs to Immove Process (GAOIGGD-94-107, May 10, 1994).

%ee Bank SuDervision: OCC’s SuDervision of the Bank of New England Was Not
Timelv or Forceful (GAO/GGD-91-128, Sept. 16, 1991), and Failing Banks:
Lessons Learned From Resolvina First Citv Bancomoration of Texas (GAO/GGD-
95-37, Mar. 15, 1995).

7See Edward C. Ettin, The Evolution of the North American Banking: Svstem,
Board of Governors of the Federal Reserve System, July 1994, and John H. Boyd
and Mark Gertler, Are Banks Dead? Or Are The Renorts Greatlv Exaggerated,
Federal Reserve Bank of Minneapolis, Quarterly Review, Summer 1994.

7                                              GAO/OCE-97-3R Banking and Commerce
ENCLOSURE I                                                          ENCLOSURE I

of market power on their own. Further, the opportunities for banks to add to their
market power could increase in the future as a result of greater industry
consolidation, which has been ongoing for some time.8

14.    Can you give an example of a bank that has market power--by which I
       mean the ability to injure a potential borrower by withholding funds?

While we do not have specific examples, insurance agents, securities firms, rural
development officials, and academic experts have all expressed concerns that
certain specific markets may still be susceptible to the exercise of market power--
specifically, as concerns the availability of credit to small businesses in certain
geographic areas.g




‘See Bank Oversight: Few Cases of Tvinp Have Been Detected (GAO/GGD-97-58,
May 8, 1997), and Interstate Banking: Exneriences in Three Western States
(GAO/GGD-95-35, Dec. 30, 1994).

‘See GAO/GGD-97-58 and GAO/GGD-95-35.

8                                            GAO/OCE-97-3R Banking and Commerce
ENCLOSURE II                                                      ENCLOSURE II


                Bibliography:   Mixing Banking and Commerce


Aguilar, L. (1990), “Still Toe-to-Toe: Banks and Nonbanks at the End of the
‘80’s,” Economic Perspectives, Federal Reserve Bank of Chicago, January/February,
12-23.

Amel, D.F. (1996), “Trends in the Structure of Federally Insured Depository
Institutions, 1984-94,” Federal Reserve Bulletin, 82, 1, January, 1-15.

Ang, J.S., and T. Richardson (1994), “The Underwriting Experience of Commercial
Bank Affiliates Prior to the Glass-Steagall Act: A Re-examination of Evidence for
Passage of the Act,” Journal of Bankinp and Finance, 18, 351-395.

Bentson, G., G. Hanweck, and D. Humphrey (1982), “Scale Economies in
Banking: A Restructuring and Reassessment,”Journal of Monev Credit and
Banking, 14, 435-456.

Berlin, M. (1988), “Banking Reform: An Overview of the Restructuring Debate,”
Business Review, Federal Reserve Bank of Philadelphia, July/August, 3-14.

Corrigan, E. G. (1987), “Keep Banking Apart,” Challenee, November-December,
28-35.

Conigan, E.G. (1990), “Reforming the U.S. Financial System: An International
Perspective,” Ouarterlv Review, Federal Reserve Bank of New York, Spring, l-14.

Corrigan, E.G. (1991), “The Banking-Commerce Controversy Revisited,” Ouarterly
Review, Federal Reserve Bank of New York, Spring, l-l 3.

Corrigan, E. G. (1991), “Balancing Progressive Change and Caution in Reforming
the Financial System,” Ouatterlv Review, Federal Reserve Bank of New York,
Summer, l-12.

Edwards, F-R., and F.S. Mishkin (1995), “The Decline of Traditional Banking:
Implications for Financial Stability and Regulatory Policy,” National Bureau of
Economic Research Working Pauer No. 4993, January.

The FDIC Ouarterly Banking Profile: Commercial Banking Performance-Third
Quarter 1996, Federal Deposit Insurance Corporation, p. 5.



9                                            GAO/OCE-97-3R Banking and Commerce
ENCLOSURE II                                                      ENCLOSURE II

Federal Reserve Bank of San Fransisco (1997), “Efficiency of U.S. Banking Firms
-- An Overview,” Economic Letter, Federal Reserve Bank of San Francisco, 97-06,
February 28, 1997.

Greenspan, Alan, (1997), Statement before the Subcommittee on Financial
Institutions and Consumer Credit of the Committee on Banking and Financial
Services, U.S. House of Representatives, Feb. 13, 1997.

Isimbabi, M.J. (1994), “The Stock Market Perception of Industry Risk and the
Separation of Banking and Commerce,” Journal of Banking and Finance, 18, 325-
349.

John, K., T.A. John, and A. Saunders (1994), “Universal Banking and Firm Risk-
taking.” Journal of Banking and Finance, 18, 307-323.

Kareken, J.H. (1986), “Federal Bank Regulatory Policy: A Description and Some
Observations,” Journal of Business, 59, 1, 3-48.

Kaufman, H. (1991), “How Treasury’s Reform Could Hurt Free Enterprise,”
Challenge, May-June, 4- 10.

Mester, L. (1987) , “Efficient Product of Financial Services: Scale and Scope
Economies,” Business Review, Federal Reserve Bank of Philadelphia
January/February, 1S-25.

Pavel, C., and H. Rosenblum (1985), “Banks and Nonbanks: The Horse Race
Continues,” Economic Perspectives, Federal Reserve Bank of Chicago, May/June,
3-17.

Puri, M. (1994), “The Long-Term Default Performance of Bank Underwritten
Security Issues,” Journal of Banking and Finance, 18, 397-418.

Saunders, A. (1988), “Bank Holding Companies: Structure, Performance, and
Reform,” in W.S. Ha& and R.M. Kushmeider, (eds.), RestructurinP Bankino and
Financial Services in America, Washington, D.C., American Enterprise Institute for
Public Policy Research, 156-202.

Saunders, A. (1994), “Banking and Commerce: An Overview of the Public Policy
Issues,” Journal of Banking and Finance, 18, 231-254.




10                                          GAO/OCE-97-3R Banking and Commerce
ENCLOSURE II                                                     ENCLOSURE II

Saunders, A., and P. Yourougou (1990) , “Are Banks Special: The Separation of
Banking from Commerce and Interest Rate Risk,” Journal of Economics and
Business, 42, 171-182.

Shaffer, S. (1988), “A Revenue-Restricted Cost Study of 100 Large Banks,”
mimeo, Federal Reserve Bank of New York.

Shull, B. (1994), “Banking and Commerce in the United States,” Journal of
Banking and Finance, 18, 255-270.

Spellman, L.J. (1982), The Depository Firm and Industrv: Theorv. History. and
Realation, New York, Academic Press.

Steinhen; A., and C. Huveneers, (1994), “On the Performance of Differently
Regulated Financial Institutions: Some Empirical Evidence,” Journal of Banking
and Finance, 18, 271-306.

United States General Accounting Office (1988), Bank Powers: Issues Related to
Repeal of the Glass-Steagall Act (GAO/GGD-88-37, Jan. 22, 1988).

United States General Accounting Office (1988), Usine Firewalls in a Post Glass-
Steagall Banking Environment, (GAO/T-GGD-88-25, Apr. 13, 1988).

United States General Accounting Office (1989), Thrift Failures: Costlv Failures
Resulted From Remlatorv Violations and Unsafe Practices (GAO/AFMD-89-62,
June 16, 1989).

United States General Accounting Office (1991), Bank Sunervision: OCC’s
Sunervision of the Bank of New England Was Not Timelv or Forceful
(GAO/GGD-91-128, Sept. 16, 1991).

United States General Accounting Office (1994), Bank Insider Activities: Insider
Problems and Violations Indicate Broader Management Deficiencies (GAO/GGD-
94-88, Mar- 30, 1994).

United States General Accounting Office, (1995), Financial Regulation:
Modernization of the Financial Services Regulatorv Svstem (GAO/T-GGD-95-121,
Mar. 15, 1995).

United States General Accounting Office (1996), Bank Oversizht: Fundamental
Principles for Modernizing; the U.S. Structure (GAO/T-GGD-96-117, May 2,
1996).


11                                          GAO/OCE-97-3R Bank&g and Commerce
ENCLOSURE II                                                     ENCLOSURE II

United States General Accounting Office (1996), Bank Oversight Structure: U.S.
and Foreign Exnerience Mav Offer Lessons for Modemiziw U.S. Structure
(GAO/GGD-97-23, Nov. 20, 1996).

United States General Accounting Office (1996), Bank and Thrift Rewlation:
Imnlementation of FIIXCIA’s Prompt Regulatorv Action Provisions (GAOIGGD-
97-18, Nov. 21, 1996), p. 28.

Volker, Paul A. (1997), Statement before the Subcommittee on Financial
Institutions and Consumer Credit of the Committee on Banking and Financial
Services, U.S. House of Representatives, Feb. 25, 1997.




(97263 1)




12                                         GAO/OCE-97-3R Banking and Commerce
                      ,

                          ,’
;   ‘,’   ‘. ‘,   L
Ordering    Information

The first copy of each GAO report and testimony is free.
Additional  copies are $2 each. Orders should be sent to the
foBowing address, accompanied by a check or money order
made out to the Superintendent    of Documents, when
necessary. VISA and Master-Card credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting OftIce
P.O. Box 6015
Gaithersburg, MD 20884-6015

or visit:

Eoom 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using f;ur number (301) 2584066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and
testimony.   To receive facsimile copies of the daily list or any
list from the past 30 days, please caI.I (202) 512-6000 using a
touchtone phone. A recorded menu will provide information         on
how to obtain these Ii&s.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with “info” in the body to:

info@www.gao.gov
United States
General Accounting  Office
Washington, D.C. 20548-0001


Official Business
Penalty for Private    Use $300

Address   Correction   Requested




                                     : :”
                                       .:: ,”
                                      _‘j,
                                   ;;.y,,: