The economy is heading into a deflationary period that will require bankers to pay special attention to risk management techniques, says L.M. "Bud" Baker Jr., president and chief executive of Wachovia Corp.

"The changing environment for banking imposes risks in a way that harshly penalizes any failure to manage in a disciplined fashion," Mr. Baker said in a surprisingly cautionary keynote address at a risk management conference sponsored by American Banker.

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