WASHINGTON

Credit-risk models at most large banks are unsophisticated and cannot be used to determine capital needs, a Fed study due out today found. Page 2

House Banking Chairman Jim Leach said he opposes the Treasury in the reform debate because administration officials have too much interest in raising money from industry contributors. Page 2

REGIONAL

First Union said it wrapped up its systems conversion of the former CoreStates Financial -the biggest ever for the North Carolina company. Page 6

Though capital markets are showing signs of life after months of turmoil, fourth-quarter earnings predictions for some big banks are gloomier. Page 6

COMMUNITY

The New York State Banking Board is preparing to relax stock repurchase restrictions on state-chartered thrifts, many of which are loaded with excess capital after mutual-to-stock conversions. Page 7

CORPORATE FINANCE

After years of viewing banks as suppliers of commodity-like products, corporate treasurers want fewer but deeper banking relationships. Stephen Kearney of the U.S. Postal Service says, "By moving to strategic partnerships we can get better customer service for our existing cash management business." Page 28

INVESTMENT PRODUCTS

Founders Asset Management, a unit of Mellon Bank, hired two fund managers from Unionbancal to run its flagship portfolio. Page 9

MORTGAGES

HOME EQUITY: Aames Financial and Amresco are the latest casualties of the liquidity crisis in specialty mortgage lending. Page 12

CARDS

FLEET and First Union presented arguments in a Connecticut court seeking reversal of a state ban on ATM fees. Page 15

Maosco, a technology consortium that grew out of the Mondex smart card program, has won an endorsement from Discover Financial Services. Page 15

TECHNOLOGY

BankAmerica's consumer finance group completed the first phase of a $1 million installation of help-desk software for employees' technical problems. Page 19

MARKETS

The latest turmoil in the financial markets points to the need for an international regulator, writes renowned market observer Henry Kaufman. Page 29

The Fed's third rate cut in the last two months had little impact on the market for bank bonds, which had shifted into high gear after the earlier cuts. Page 30

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