WASHINGTON

MASSACHUSETTS will be the first state to base examination fees on a financial institution's health. Page 2

THE YIELD on Financing Corp. bonds has risen by 10 basis points over comparable Treasury securities in the last 18 months, indicating that investors are getting nervous. Page 4

REGIONAL BANKING

SANWA BANK California has shifted its focus to relationship banking - at a time when many of its California rivals have adopted a line-of-business organization. "People want to have a long-term relationship with a bank, so that they can go to the bank for all their banking needs," said Larry Layne, who heads the relationship banking group. "You can't do that with a line-of-business structure." Page 6

CAREER TRACKS: Headhunting and outplacement firms, which profit from bank mergers and restructurings, are benefiting in another way: They're hiring bankers as recruiters. Page 7

COMMUNITY BANKING

SOME CONSULTANTS earn their fees with "bread and butter" advice; others serve only as "rainmakers," writes Paul Nadler. Page 9

A SMALL Maryland thrift is preparing for a second proxy fight in as many years with its largest investor, Seymour Holtzman of Florida. Page 9

MORTGAGES

FOUR BIG lenders accounted for 26.5% of mortgage-backed securities backed by federal agencies in the first half. Page 10

HUD SECRETARY Henry Cisneros unveiled an Internet site that provides national data on minority lending. Page 11

CREDIT/DEBIT/ATMs

TWO MAJOR names in the field - First Data and Donnelley - have joined forces to offer a product package addressing all aspects of card marketing. Page 12

INVESTMENT PRODUCTS

INSURANCE: Taking advantage of a U.S. Supreme Court ruling in March, Commerce Bancorp in New Jersey is buying two small insurance agencies. Page 14

COMERICA soon will be able to offer international equity funds, because an affiliate plans to buy a stake in a British investment firm. Page 16

TECHNOLOGY

A NEW ALLIANCE with Microsoft puts Verifone in a strong position to process electronic payments on the Internet. Page 18

FINANCE

ASSET-BACKED securities issuance set a record in the second quarter as banks and other companies turned away from issuing straight public debt. Page 22

BANK STOCKS lost ground as investors cashed in profits won in Friday's record-setting rally. Analysts expect bank shares to move ahead in coming weeks. Page 22

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