MARKET RISK: The federal banking agencies approved a rule requiring banks with large securities and foreign exchange portfolios to use an internal model to calculate the amount of capital they must hold against swings in the market. Published Sept. 6; effective Jan. 1, 1998.

HOME LOAN BANK DIRECTORS: The Federal Housing Finance Board authorized the 12 Home Loan banks to set the pay of their directors. Published Aug. 21; effective Jan. 1.

AUDIT CONTRACTS: The National Credit Union Administration approved a rule requiring all credit unions to obtain the signatures of outside auditors on contracts specifying what services they provide to the institution. Published Aug. 8; effective Dec. 31.

FLOOD INSURANCE: The Fed, OCC, FDIC, NCUA, Office of Thrift Supervision, and Farm Credit Administration issued a revamped flood insurance rule that will let banks charge borrowers for determining whether properties lie in flood zones. Published Aug. 29; effective Oct. 1.

SAFETY and SOUNDNESS: The banking and thrift agencies issued new regulatory guidelines on asset quality and earnings. The asset-quality guidance requires institutions to identify problem assets, estimate inherent losses, and establish adequate reserves. The earnings guide requires institutions to compare revenue trends with various benchmarks. Published Aug. 27; effective Oct. 1.

INTERLOCKS: Bank and thrift regulators approved a rule allowing institutions with assets of less than $20 million to share managers with affiliated institutions of more than $20 million. Published Aug. 2; effective Oct. 1.

INVESTMENT ADVICE: The Fed gave banks and their holding companies permission to buy mutual funds from firms that they advise. Published Aug. 30; effective Sept. 30.

SMALL BANK EXAMS: The OCC revamped risk-based exams for national banks with less than $1 billion of assets. Rather than scrutinize a bank's risks and risk-management techniques, OCC examiners will focus on performance. Released April 29. Effective Sept. 30. HOME LOAN BANK MEMBERSHIP: The Federal Housing Finance Board adopted a rule giving the 12 Federal Home Loan banks authority to approve applications for membership in the system. Published Aug. 16. Effective Sept. 16.

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