Nearly half of a bank's unrealized equity investment gains could be counted as Tier 2 risk-based capital under a Federal Deposit Insurance Corp. proposal issued Tuesday. The proposal, which is being adopted by all the banking and thrift agencies, would affect roughly 600 institutions.

Only 21 institutions hold investments with unrealized gains large enough to comprise a significant proportion of their risk-based capital, said Stephen G. Pfeifer, FDIC examination specialist. These banks made equity investments before the practice was barred by state or federal rule changes.

SunTrust Bank, Atlanta, would be a big winner. SunTrust helped take Coca-Cola public in 1919 and collected management fees in the form of stock. The soft drink company's stock is still recognized by regulators at its original value of $110,000; today the stock has a market value of about $2.8 billion.

"The only time we have come close to the lower limit of being a highly capitalized institution was at our Atlanta bank, so this would certainly give them the breathing room for future expansions," said James C. Armstrong, director of investor relations at the $54 billion-asset banking company.

The interagency proposal, which will be open for comment until late November, mirrors a provision in the 1988 Basel Accord, which created an international capital standards framework. Specifically, the proposal would allow 45% of pretax unrealized gains on equity securities to count toward Tier 2 capital.

Commercial banks are generally barred from investing in equity securities, but there are a few exceptions. Commercial banks may own up to 5% of a company's voting stock. National banks also may purchase certain equity securities issued by housing-related government-sponsored enterprises.

Also Tuesday, the FDIC proposed a substantial overhaul of risk-based capital rules for recourse agreements and similar tools used to sell securitized assets. The plan mirrors those issued by the other banking and thrift agencies this summer.

Finally, the FDIC and the Office of the Comptroller of the Currency on Tuesday finalized an August 1995 interim rule that lowered the capital requirements for banks that sell small-business loans and leases with recourse. The Office of Thrift Supervision is expected to follow suit shortly; the Federal Reserve Board issued a final rule in August 1995.

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