Friends of community banks should be saddened rather than gladdened by the results of a new study showing that these institutions are likely to curb sharply their use of derivatives.

The survey, conducted by Grant Thornton, an accounting and management consulting firm, reports that nearly one-third of the 800 responding banks that have purchased derivative securities in the past think they will not make similar investments in the future. According to the study, 82% of responding community banks have invested in mortgage-backed securities, collateralized mortgage obligations, and structured notes in the past. But only 58% of these organizations feel they will invest in such securities in the future.

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