The fate of CMOs in banks' held-to-maturity portfolios remains uncertain, even after industry representatives appealed to regulators to clarify language issued by the Federal Financial Institutions examination council April 15. Until the issue is settled, accounting experts are steering bankers away from these high-risk securities.

Industry representatives and regulators sat down May 10 at the Federal Reserve Board to discuss the FFIEC's revision of its Supervisory Statement on Securities Activities and try to solve the problem. The revision allows the divestiture of high-risk securities from held-to-maturity portfolios,aprovision the industry says conflicts with Generally Accepted Accounting Principles.

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