WASHINGTON - The Federal Reserve Board on Friday went along with a new interagency policy proposal on interest rate risk, but not without grumbling about it first.

Fed Chairman Alan Greenspan and his colleagues had a lot of questions about how the central bank, the Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency would go about measuring banks' interest rate risk.

The proposal, which the agencies have been mulling since the FDIC Improvement Act was passed in 1991, calls for regulators to collect interest rate data from 3,822 banks. Institutions with assets under $300 million, Camel ratings of 1 or 2, and a low proportion of long-term loans would be exempted from the reporting requirement.

Banks with internal models to measure interest rate risk can also submit those measurements. But, unlike the market risk proposal of the Basel Committee on Banking Supervision, which was endorsed by the Fed June 21, banks can't substitute internal modeling for standardized reporting to regulators.

This raised Mr. Greenspan's ire.

"There's a basic contradiction in having both the Basel approach and this approach," he said. "How's that going to get recognized?"

At this point, the proposal deals only with measuring risk. Regulations incorporating the measurements into capital standards will come later.

The FDIC board approved the proposed "joint policy statement" on interest rate risk measurement last Tuesday. After the Comptroller's office joins in, it will be published in the Federal Register and banks and other interested parties will have 30 days to comment.

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