State Street Corp. expects continued volatility on international exchanges.

"You can't have this kind of growth without increased volatility," said Marsh Carter, chairman and chief executive of the Boston-based custodial bank and asset management company.

"The real question," he added, "is what is going to be the range of that volatility."

Mr. Carter noted that a decade ago seven or eight countries were considered to be emerging markets, but the number has grown to about 38. Moreover, he said, daily foreign exchange trading has hit around $2 trillion, and investment by U.S. pension funds outside the United States is expected to reach $2 trillion by 2000, up from $350 billion in 1990.

State Street officials added that market volatility would bring more opportunities as well as more risks.

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