Derivatives legislation may be in the formative stages in Washington, but investors in bank stocks are already spooked. "Equity investors in bank stocks are a bit leery because of the probability of what the federal government might do. The stocks of banks that get a significant portion of their earnings from derivatives have not been performing well," said Sam Lehman of Natwest Washington Analysis.

The congressional activity has affected trading banks such as Bankers Trust New York Corp., as well as banks that are known to use derivatives to hedge their own risk, such as Bane One Corp.

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