WASHINGTON

Proponents of piecemeal regulatory reform faced off against radicals calling for the division of the banking system during a banking conference Monday in Washington. Page 2

Noting a 50% jump in operating expenses at the Federal Reserve Board, the Government Accounting Office urged the Fed to review its operations and cut unnecessary costs. Page 2

REGIONAL BANKING

After threatening a move out of Pennsylvania, PNC Bank got $17.5 million in grants and loans from the city of Philadelphia and state officials to help build a $70 million operations center. Page 5

Executives from Chase Manhattan and Chemical downplayed the loss of customers anticipated when the two banks merge at the end of this month. They stressed the advantages the companies expect to gain from the union. Page 7

MORTGAGES

Last year's High Cost Mortgage Act has discouraged many lenders from making high-points loans. "There's no doubt that they're making less profit," says J. Terrell Brown of United Companies Financial. But the pendulum is expected to swing back as the extra documentation and cooling- off time required become familiar. Page 10

A small Irvine, Calif., mortgage company has hired a heavy hitter from American Express to be its chairman, signaling the company's determination to go it alone in the field. Page 11

INVESTMENT PRODUCTS

A new report contradicts the prevailing wisdom that many investment companies will have to merge to survive the next few years. The report suggests that growth in investable assets will take some of the edge off the deal-making frenzy. Page 12

The plan to fine-tune mutual fund laws won lukewarm backing from the SEC's chief of investment management, who praised the plan to consolidation fund regulation in Washington. Page 12

CREDIT/DEBIT/ATMs

MasterCard's regional electronic banking network has absorbed the 30 members of a Kansas network that had seen more than half its members flee for bigger networks that offered more services. Page 17

TECHNOLOGY

State Street Boston has launched an investment management software system designed to let portfolio managers customize information for analysis, management, and client reports. Page 18

Cross-selling and customer relationships are fashionable buzzwords, but they miss a crucial point. You make money on some customers and lose it on others. The trick is determining which is which, writes Richard H. Evans. Page 19

FINANCE

Despite Signet Banking's $81 million exposure to an allegedly fraudulent loan, two analysts gave the company upgrades and share prices rose Monday. Back page

A 15-bank consortium led by Citibank, Morgan Guaranty Trust Co., and Toronto-Dominion Bank has closed an $814 million bank credit facility that will provide working capital to Niagara Mohawk Power Corp. Page 22

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