WASHINGTON - The Federal Reserve Board is building a sophisticated computer system meant to help examiners keep a constant eye on the largest banking companies in the country.

The system, called Bond, for Banking Organization National Desktop, will be available April 3, and the Fed has scheduled enhancements through 2003. It grew out of the government's decision to focus supervision on a bank's riskiest businesses, which requires frequent, in some cases daily, review of data rather than the periodic snapshot that an annual exam provides.

"This emphasis on continuous monitoring means that there is a lot of flowing information that has to be assembled, structured, and shared," Fed Governor Laurence H. Meyer said. "We're communicating a great deal of information. You can't do this over the telephone."

About 1,200 people will have access to the Bond system, including examiners from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., as well as the California, Connecticut, Florida, Georgia, Illinois, and New York State banking departments.

The system will include documents describing bank structures and risks, balance sheets, enforcement actions, exam reports, and correspondence between supervisors and banks. This information typically moves among supervisors by fax, telephone, e-mail, and regular mail or is viewed on different computer systems. With all the information accessible via one computer system, supervisors should be better equipped to stay on top of moves within big banking companies.

"They can change their risk profiles more quickly," Mr. Meyer said. The Bond system is "really the technology backbone for the supervision of large and complex banks."

These institutions, roughly 20 domestic and 10 foreign banks, are supervised by special teams of Fed examiners who also consult with other federal and state banking agencies, state insurance commissioners, and securities regulators.

Building the Bond system is budgeted at $18.5 million. The Fed spent $1.2 million on it last year and expects to spend $3.2 million this year and more than $3 million each of the four following years.

It will replace two other computer servers, the Foreign Bank Desktop and the Large Bank Desktop. Information residing in those forerunners is being transferred to the Bond system, which will provide far more detail. For instance, where the older desktops track holding company data, the Bond system will add particulars on all subsidiaries and related entities.

"These are diversified financial services holding companies," Mr. Meyer explained. "There are all kinds of affiliates and subsidiaries to worry about."

Because the Bond system is an internal platform, the Fed has not communicated much about it to banks. Yet the industry will probably appreciate it, said Richard M. Whiting, executive director of the Financial Services Roundtable. He predicted that the Bond system will link supervision more tightly to market movements. "That can only be better for bank supervision," Mr. Whiting said.

With the Bond system, data on peer banks may be aggregated for a big-picture analysis. Initially, examiners will be able to generate searches to gauge risk by region or country. In 2001 the Bond system will also be able to sort documents by business line, too, enabling examiners to compare risks among credit card banks for example.

The system is also expected to smooth supervision when markets get rocky. If the Bond system were in place during the summer and fall of 1998, it could have made regulators' jobs easier, Mr. Meyer said."It's not that supervisors didn't have this information," he said. "This just means that it gets to everybody at the same time."

Richard Spillenkothen, director of the Fed's division of banking supervision and regulation, agreed. "You will spend less time trying to run down information and more time making decisions," he said. "If you don't have current information readily available, your hands are tied."

Supervisors will continually update profiles of banks, assessing credit, legal, liquidity, market, operational, and reputation risks. When examiners on the road upload documents to the Bond system from laptops, messages will be sent to alert people who have clearance to see them. Users will customize a personal home page, which will automatically piece together a current picture of what is going on in a particular institution.

Other bells and whistles include a link to the Internet so examiners can pull down information about institutions from their Web sites or news organizations. Besides text documents, videos and audio recordings can be accessed.

Though authorized people can easily input documents, the system will limit access on a need-to-know basis. Mr. Spillenkothen said passing information around electronically reduces the risk of it getting into the wrong hands. "I think we'll have better control," he said. "You're not going to have physical documents sitting on a desk."

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