Regulators may have let banks off the hook when it comes to uniform risk management disclosures, but investors probably won't, panelists at a New York conference said.

"We're going to see a convergence of standards," Daniel T. Mudge, managing director at Bankers Trust New York Corp., said Tuesday at the risk management conference sponsored by the Bank Administration Institute. "There's now a plethora of (reporting) choices available and eventually standards will be set."

Risk management entails measuring how changes in market factors such as interest rates could affect a portfolio of securities and businesses. As portfolios have grown larger and more complicated, consultants and regulators are urging banks to invest more time and money on this combination of science, art, and guesswork.

Comptroller of the Currency Eugene Ludwig warned the conference that banks' cost cutting could jeopardize their ability to manage risk. (See story on page 3.)

Panelists said the need for a more uniform disclosure was being driven by investors' need to make comparisons.

Although banks report more information on risk management than most companies, different banks measure risk in different ways. That makes it difficult for investors to determine which banks are managing risk well.

"More risk disclosure could help the market find out where earnings per share are coming from. They could learn where a bank thinks risk is and its strategy," said Christine Cummings, senior vice president for supervision and regulation at the Federal Reserve Bank of New York.

Regulators have explored this issue before and decided that complete convergence of disclosure standards is not necessary, said Diane Glossman, analyst at Salomon Brothers. But Ms. Cummings said she believed investors will demand what regulators have not.

"We would like to see the marketplace drive disclosure," she said. "I expect more standardization to develop as people figure out which disclosures are important."

Many bankers at the conference, however, opposed standardization.

"I would be very upset with uniform value-at-risk disclosures," said Richard D. Lodge, president of Banc One Funds Management Co. "Given the way we look at risk, it would serve no purpose at all."

Without some regulatory agency demanding uniform reporting requirements for everyone, it is likely that disclosure will take a more piecemeal track. And that could hurt banks, said Jeanne B. Krips-Tobin, executive vice president for balance sheet management at KeyCorp.

Until the day comes when uniform reporting standards prevail, disclosure is "not only meaningless but dangerous," she said. "People may mistake it for science."

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