Separate Accounts

As you say in your story "Fight for Survival" ((ECONOMY & BUSINESS, May 4)), there is a battle under way between commercial banks and investment banks. But there is a bigger financial fight raging, with far more profound consequences for the American consumer and the future of our financial system. At issue is whether corporate giants like General Motors, Sears and Honda should be allowed to own non-bank banks, which would destroy the historic separation between banking and commerce in this country. The Reagan Administration supports the breaking down of these walls. Federal Reserve Board Chairman Paul Volcker, among others, does not. The matter, now before Congress, makes the turf wars between commercial banks and investment banks look like a molehill.

Kenneth A. Guenther

Executive Vice President

Independent Bankers Association of America

Washington