Regulators adopted new exams Wednesday that subject troubled state-chartered banks and thrifts to more scrutiny while reducing oversight of healthy institutions.

The Federal Reserve Board, the Federal Deposit Insurance Corp., and the Conference of State Bank Supervisors collaborated for more than a year to develop guidelines that target six risks including loan portfolio and capital management.

"We wanted to let our examiners know they didn't have to turn over every rock in every bank," said Nicholas J. Ketcha Jr., the FDIC's director of supervision.

"If you are in a well-managed bank, and you have looked at the policies, you have looked at the procedures, you have done some testing on some of the transactional types, that's as far as you need to go."

The uniform procedures replace existing examiner guidelines issued by the Fed and FDIC. They are intended to explain how to conduct and document risk-based reviews. The agencies have tested the policies in more than 90 institutions, and more than 20 state banking agencies are using them already.

These pilots have cut the length of on-site Fed reviews between 30% and 50%, officials said. However, regulators warned that exams at poorly managed institutions could last longer than a normal review. Special procedures for the year-2000 problem and nondeposit investment products also might extend examination times.

Industry reaction generally has been favorable.

"Bankers are real pleased with the direction the agencies are going with this," said Karen M. Thomas, regulatory affairs director of the Independent Bankers Association of America.

However, some worry examiners will force small institutions to maintain complex risk-management systems.

"Our risk management policy, I'm sure, is nothing like Citibank's," said William Green, a vice president of Cattaraugus County Bank in Little Valley, N.Y. "It's adequate for our institution for what we are involved in."

"Their heart is in the right place on this," said Gof Thomson, president of the Bank of New Glarus, Wis., but he said the criteria may be "very subjective."

In order to simplify examinations further, federal and state examiners are being equipped with a software program-dubbed Elvis for examiner laptop visual information system-that is geared for these new procedures. Examiners may use the program to take and organize notes and store agency rules.

"It's going to free the examiners from a lot of the documentation and a lot of the paperwork," said Richard Spillenkothen, the Fed's director of supervision and regulation.

Reducing this burden will give examiners more time to critically analyze a bank's operations and spot problems that could emerge later, he said.

Risk-based reviews focus less on transactions-such as sampling large numbers of loans-and more on an institution's policies and practices for managing risks.

Similar to the Fed's existing risk-based system, the new guidelines permit examiners to expedite reviews of institutions that practice proper oversight. Conversely, inadequate controls and auditing programs at a bank or thrift would prompt an expanded examination.

For example, in the case of loan portfolios, examiners will investigate initially whether audit procedures are sufficient, the internal loan grading system is accurate, and losses are recognized in a timely manner. If so, they can wrap up their report, but, if not, they will dig deeper to determine if such shortcomings might hurt the bank.

Besides portfolio and capital management risk, the agencies will look at securities, others assets and liabilities, management and internal controls, earnings, and liquidity.

The Fed, the FDIC, and the Conference of State Bank Supervisors have been cooperating on other projects to streamline examinations. They have developed an automated system to collect loan data and in August agreed to technical standards for it.

The philosophy behind their new examination procedures is very similar to the supervision by risk systems that the Office of the Comptroller of the Currency and the Fed introduced in 1995.

The OCC system assesses nine risks, including credit and interest rate, and devotes more attention to institutions that test poorly. The Fed targeted the same threats, but it merged some categories to produce a list of six risks. The FDIC had only partially rolled out its system, a complex matrix that required more intensive reviews depending upon the problem uncovered at the institution.

The OCC also is testing laptop computer software for examiners called ExaminerView. The Office of Thrift Supervision in late August unveiled a computer-based system that examiners may use to analyze more data off-site. The thrift agency was a pioneer in risk management, having unveiled the first risk-based exams in 1989.

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