New regulatory guidelines on asset quality and earnings take effect Oct. 1, the banking and thrift agencies announced this week.

Issuing of the guidelines Tuesday completed the agencies' implementation of a controversial provision in the Federal Deposit Insurance Corporation Improvement Act of 1991 that required regulators to adopt rules setting safety and soundness standards for banks and thrifts.

The interstate banking law of 1994 eased that mandate, allowing the agencies to issue nonbinding guidelines rather than quantitative rules.

The bulk of the safety and soundness guidelines were adopted in July 1995. This week's asset quality and earnings guidelines complete the set.

The asset quality guide requires institutions to identify problem assets, estimate inherent losses, consider the size and risk of credit concentrations, compare problem assets to capital, and establish adequate reserves.

The earnings guide requires institutions to compare revenue trends with such benchmarks as equity and assets, with historical experience, and with the trends of their peers. The guidelines also suggest that banks and thrifts evaluate the adequacy of their earnings given the size, complexity, and risk profile of their assets and operations.

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