WASHINGTON:

REGULATORS OBJECTED to legislation that would prevent the Federal Deposit Insurance Corp. from building its insurance fund without limit. "We are troubled by the rigid limit on reserve levels," said John D. Hawke Jr., a Treasury under secretary. Page 2

THE LATEST ATTEMPT by regulators to measure market risk is an improvement over earlier efforts but still too rigid and burdensome, banks told the Fed, the Comptroller's office, and the FDIC. Page 3

REGIONAL BANKING:

MELLON SENT a strong signal that it is not for sale, analysts say, when it extended the contract of its independence-minded chairman. Page 4

COAST FEDERAL Bank is selling an accounts-receivable financing unit to Imperial Credit Industries for $140 million in cash. The Los Angeles thrift said the sale would help it focus on retail banking.

Page 4

COMMUNITY BANKING:

THOUGH BANKS in general took in 60% more trading revenue in the second quarter than a year earlier, community banks were not on the bandwagon. Most smaller banks in derivatives use them for hedging, not trading.

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STATE TRADE GROUPS in the banking industry are under increasing pressure to merge. Page 6

MORTGAGES:

NORWEST MORTGAGE has hired a superstar, Mark L. Korell, as its No. 2 executive. The move seems a sign of plans to keep expanding fast. Page 8

IN A MARKET that has lenders scrambling to find business, California Federal Bank is paying special attention to credit quality and pricing, chairman Edward G. Harshfield said in an interview.

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INVESTMENT PRODUCTS:

MICHAEL C. BAKER won't have much time to ease into his new job at Amsouth. The Barnett veteran's mission is to consolidate four investment services businesses into a single unit. Page 10

CD SALES SLOWED to a trickle this summer. With rates lower, annualized asset growth dipped to 1.69% by late August, from nearly 50% at the start of the year. Page 11

TECHNOLOGY:

STERLING SOFTWARE is offering to let banks remarket access to its network for electronic data interchange.

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CREDIT/DEBIT/ATMs:

DELINQUENCY ROSE AGAIN in April-June, for the third quarter in a row. Some experts say cobranded cards with bonuses are leading consumers astray.

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FINANCE:

AS CONSOLIDATION continues, bankers and analysts are squaring off with increasing frequency over whether cost cutting or revenue growth is more important in measuring an acquisition's value. Back page

THE CHICAGO BOARD of Trade and the Chicago Mercantile Exchange agree that risk-based capital standards need revising, but they disagree about how to measure risk.

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