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To: long-gone who wrote (53285)	5/26/2000 1:58:00 AM
From: Rarebird	Respond to of 116762

WASHINGTON, May 25 (Reuters) - Federal Reserve Chairman Alan Greenspan said on Wednesday the strong U.S. economy will not shield banks from risks inherent in their business, urging them to remain vigilant against fraud and lax standards. As he has done repeatedly in recent weeks, Greenspan again declined to address the outlook for the economy or key interest rates in remarks prepared for delivery to a National Association of Urban Bankers conference in San Francisco. "The high cost of recent failures reinforces lessons of the past for banks and supervisors, including the need for continuous vigilance against causes of bank failure such as fraud, credit concentrations, and rapid entry into new and unfamiliar activities," he said. A text of his speech was released in Washington. Eight U.S. banks and thrifts went bust last year, the largest number since 1995, costing the federal deposit insurance funds almost $1 billion and spurring Congress and regulators to look for possible underlying problems. But Greenspan noted that recent surveys suggested "banking organizations are becoming more sensitized to risk and are continuing to firm their lending practices." Greenspan also called on banks to provide more comprehensive disclosure of their activities to allow financial markets to better analyze their risks and "exert discipline on those that would take on imprudent levels of exposure." "While not a panacea, improved disclosure can complement the supervisory process and regulatory capital, and obviate more intrusive investigations, holding out the promise of less supervisory intervention," he said. ((Washington newsroom, +1 202 898-8377, fax +1 202 898-8383, washington.economic.newsroom@reuters.com))