WASHINGTON

After five months of waiting, Treasury official John D. Hawke Jr. starts work today as comptroller of the currency. Page 2

Companies should not use reserves as a "cookie jar" to raid during bad times, SEC Chairman Arthur Levitt said. Page 3

COMMUNITY

The planned merger of two North Carolina banks is on hold while authorities investigate stock purchases by one bank's former leader. Page 6

MORTGAGES

HOME EQUITY: Three states have filed lawsuits against First Alliance, two accusing the subprime lender of deceptive practices and the third of charging excessive fees. Page 8

INVESTMENT PRODUCTS

As banks become bigger players in managing mutual fund assets, they are asking themselves whether to continue using subadvisers or to bring even specialized funds' management in-house. Page 10

REGIONAL

Slower economic growth, slackening revenues, declining loan quality. That is what some Midwest bank chief executives are expecting in the year ahead. "Most people feel there's a greater probability of a slowdown than six months ago," says Richard M. Kovacevich, CEO of Wells Fargo. Page 4

DIGITAL FRONTIERS

SMART CARDS: Schlumberger Smart Cards and Terminals has teamed up with two data security companies to make smart cards into portable biometric authentication devices. Page 13

National Australia Group of Melbourne has strengthened its already solid support for the Mondex system by buying a 5% stake in the venture's original national franchise, Mondex UK. Page 13

CARDS

Jean McKenna, senior vice president at Visa International, has been named the first chairman of the OpenCard Consortium. Page 14

Nestor Inc., which sells software used to help spot card fraud, has filed an antitrust suit against rival HNC Software. Page 14

TECHNOLOGY

A slight decrease in the number of check fraud attempts in recent years might lull bankers into a false sense of security, a top industry official says. Page 16

MARKETS

Shares of Bank of New York and Mercantile Bankshares of Baltimore fell despite announcements the companies would make big stock buybacks. Back page

Bank bond spreads improved in the absence of negative news. Back page

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