WASHINGTON -- Community banks are fighting a proposed requirement that they calculate interest rate risk.

The intent is to ensure that banks maintain adequate capital to manage the risk. But bankers say it is regulatory meddling and argue against a one-size-fits-all method of calculating rate risk.

Here is a sampling from their letters to regulators:

You are supposed to be regulatory agencies, and the last few years you have been trying to tell bankers how to make their loans, invest their funds, price their deposits. Following your dictates would have cost this bank 75% of its capital.

Paul D. Berkley

President

State Bank of Downs

Morgan-Downs, Kan.

My comment regarding . . . risk-based capital is that you are just hastening the demise of the small banks.

This bank operated in the past - even during the early '80s, when rates were 16% or 18% - and still made 1% on assets, without all the drafts proposed in the regulations.

Rolland W. Friedley

Chairman

Farmers State Bank

New Washington, Ohio

Your regulation has not provided us with an opportunity to take into account the fact that we have long-term, fixed-rate liabilities matched to long-term, fixed-rate assets.

Something should be included . . . to exempt banks like us.

Barry Armstrong

President

Peoples Bank

Mount Washington, Ky.

We agree with the concept that banks must measure interest rate risk and its impact on capital. However, our concern is how banks under $50 million will measure this risk?

How can a system be developed that is simple to use and can provide the information needed without devoting major resources to the task?

Gary F. Blackburn

President, chief executive

Farmers State Bank

Lumpkin, Ga.

No. No. No. Please don't enforce any more regulations modeling my bank after someone else's.

Patrick A. Wick

President

Bank of Turtle Lake, Wis.

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