WASHINGTON - A Federal Reserve governor says regulators should have a more open mind about the growing derivatives market.

Speaking at an American Bar Association meeting on future trends, Governor Wayne D. Angell said Friday that he views the growing derivatives market as an international competitiveness issue. "The United States, leading the world in the development of these kinds" of market instruments, should not be slowed by regulators' confusion about them, he said.

"I suppose that 90 years ago there were a lot of people out there who thought, |My goodness, moving from the horsedrawn carriage to the automobile'" would be dangerous.

Another View

However, SEC Commissioner Richard Y. Roberts advised that regulators must "catch up with the knowledge of the regulatees" about derivatives - contracts whose values change in concert with price movements in a related or underlying commodity or financial instrument.

"From the securities side, you are looking at no cause for panic, some cause for concern," Mr. Roberts said. "We need to look at the disclosure with respect to derivatives - it needs to be improved. The accounting treatment needs to be modernized."

Banks' derivatives holdings are getting increasing attention from Washington. House Banking Committee Chairman Henry B. Gonzalez has summoned top regulators to discuss the subject.

And Mr. Angell cautioned that there is a limit to the kinds of derivatives banks should hold. Each should hold instruments that balance its other rate-risk positions, he said.

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