Bankers said that an expected short-term relaxation of an accounting standard creates an opportunity for some banks.

Some time in the middle of November, banks will be allowed to reposition their securities portfolios without penalty into three categories defined by the Financial Accounting Standards Board: held to maturity, available for sale, and trading account classifications.

"You'll find that it (the opportunity to reclassify the portfolio) will impact those who were least active in the securities market," said Carlos Mello, a senior vice president and comptroller at People's Bank in Bridgeport, Conn.

Neal E. Arnold, treasurer at Fifth Third Bancorp, said bankers are likening the easing to "a mulligan on the back nine." In golf, a mulligan is a do-over.

Mr. Arnold said Fifth Third probably will use the opportunity to shift its portfolio from an even balance of held to maturity and available for sale to nearly 100% in available for sale.

Mr. Mello said banks face something of a balancing act in positioning their portfolio, deciding between the flexibility of available for sale approach and the minimal volatility on the book value of securities of a held to maturity classification.

There's a general leaning towards putting more securities in the held to maturity, said Mr. Mello, since marking the securities to market only recognizes the change in value for assets but not deposit liabilities.

"Marking one to market and the other at historical cost can result in uneven results," said Mr. Mello.

Mr. Mello said it's an especially opportune event for institutions that are looking at a signficiant amount of special assessment because of the recapitalization of the Safe and Bif funds.

"The Safe-insured institutions that exist right now are going to need to do capital planning and profits and losses balancing," said Mr. Mello. "This will help them dramatically."

Mr. Mello said the easing of the restrictions comes at an opportune time, given the misinterpretation between the industry and the Financial Accounting Standards Board.

Industry experts are expecting the unpunished portfolio realigment to include a question and answer section that should spell out how flexible the held to maturity designation will be.

In general, industry observers anticipate much less flexibiility in the future. "We're encouraging the banks to take advantage of this when it's finalized, because after this short correction period we expect that FASB 115 will be strictly interpreted," said Donald Ogilvie, the executive vice president of the American Bankers Association.

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