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Before committing a bank's financial resources to an affiliate, bankers must be aware of the scope of the term "affiliate" under Section 23A of the Federal Reserve Act. Section 23A places restrictions on the financial dealings between banks and their affiliate companies. The author analyzes Section 23A and the relevant regulatory and compliance issues that have recently surfaced. The author concludes that in the event of Glass-Steagall repeal, interaffiliate regulation of the financial dealings between banks and securities affiliates, as accomplished by Section 23A, would be a viable method of permitting the merger of investment and commercial banking.



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