WASHINGTON

Consumer choice, not regulation, is the best way to balance security and privacy as electronic commerce develops, three European executives told Congress. Page 2

The Fed made it easier for bank subsidiaries to act as a "riskless principle" in securities transactions, repealing nine restrictions on lending to either party in such a deal. Page 2

REGIONAL BANKING

The International Monetary Conference elected Terrence Murray, CEO of Fleet Financial Group, to its board of directors, replacing Ira Stepanian, former Bank of Boston chief executive. Page 6

COMMUNITY BANKING

BankAtlantic officials said they were stunned last week to learn that federal officials believe the Florida company's new international division is a key component in an international money laundering scheme. Page 7

Joel Kovner was caught off guard when he answered his car phone recently and was asked by a lawyer to discuss "an exit strategy" - his Professional Bancorp was coming off its most successful year. Page 7

FINANCE

Concerns about higher interest rates and a sense that banks have reached a plateau have prompted some investors to examine other sectors for opportunities. But Keefe, Bruyette & Woods analyst David Berry sees more gains ahead for bank stocks. He argues that an index shows the stocks are appropriately valued relative to the overall market. Page 22

Beneficial Corp.'s chief executive sold more than $5 million worth of company stock in late May, and its chief financial officer has notified securities regulators he plans to sell nearly $6 million. Back page

TECHNOLOGY

Marshall & Ilsley insists its highly regarded technology subsidiary, M&I Data Services, is not going public. But try telling that to Wall Street after the unit's road show to Midwest brokerages. Page 9

American Management Systems has agreed to use encryption technology from RSA Data Security to protect services it offers to banks and other financial clients. Page 9

MORTGAGES

Today's congressional hearing on the pros and cons of privatizing Fannie Mae and Freddie Mac will focus not on cutting the agencies' government ties but on protecting taxpayers. Page 13

Prudential Home Mortgage's executives are finding new life at the industry's top companies. One of them, Richard Thornberry, now president of Citicorp Mortgage, is hiring his onetime lieutenants to build operations. Page 14

INVESTMENT PRODUCTS

BankAmerica has broadly restructured its investment management and sales units in a bid to increase sales of its proprietary mutual funds. Page 15

Some banks are putting prospective brokers to the test, administering questionnaires designed by industrial psychologists to determine whether the candidates' personalities are right for a brokerage. Page 17

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