A recent study published by the Federal Reserve Bank of Atlanta questioned the Justice Department's policy of analyzing small- business loan portfolios for antitrust issues in proposed bank mergers.

Because banks are the primary institutional lenders to small businesses, additional scrutiny of their portfolios may be justified, wrote Atlanta Fed economist W. Scott Frame in the bank's March-April Economic Review.

But measuring portfolios is difficult, he wrote. For instance, if a bank operates in several markets, regulators might not be able to isolate the portfolio of a certain market. Also, evaluations of such lending look at the dollar amount rather than the number of originations or the size of the borrowers.

Efforts to work around these and other problems could be more expensive than useful, Mr. Frame wrote.

"A number of measurement problems cloud any conclusion that an exclusive subproduct market approach would provide substantial benefits in excess of the aforementioned information costs," he wrote.

Cynthia A. Glassman, managing director of Furash & Co., a Washington- based consultancy, said in an interview that Fed analysis of a bank's small-business market share ignores the fact that businesses obtain credit through personal accounts, home equities, out-of-state banks, and other sources.

"There are different kinds of lending and different kinds of lenders," she said. "The narrow market definition is obsolete."

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