Federal banking regulators, hit by a flood of complaints that they have pushed some banks to the brink of failure and have caused an unintended tightening of credit, are changing some accounting rules to help ease pressure on the banks, Comptroller of the Currency Robert L. Clarke said yesterday.

Some of the changes will give banks greater maneuvering room to deal with borrowers who are having trouble repaying loans, freeing up millions of dollars that then could be made available to other borrowers. While banks all across the country will be affected by the changes, they will have a more marked impact in areas such as New England and Washington, where bank losses have contributed to a sharp cutback in lending that has worsened the regions' economic slumps.

Many bankers have complained bitterly that examiners from the Office of the Comptroller of the Currency (OCC) have been too tough in assessing the condition of banks. The issue has been raised at the White House several times this year and apparently was a factor in White House Chief of Staff John Sununu's opposition to Clarke's appointment to a second five-year term. Clarke was reappointed by President Bush earlier this week.

Clarke said his message to his examiners "is not to overdo it. Don't underdo it. Play it in the middle. ... Use good judgment and not push it to the outer limit."

Many of the problems between bankers and regulators are the result of inconsistency on the part of examiners and uncertainty on the part of the bankers -- problems Clarke said he hopes to reduce by making the rules more precise, which would reduce the leeway bank examiners now have. Clarke said bank examinations would continue to be as rigorous as ever within the new guidelines.

The Federal Reserve Board and Federal Deposit Insurance Corp., the other federal banking regulators, are working with the OCC on the new rules.

"The point of the changes is to show reality, not to obscure reality, as in the S&L case," said FDIC Chairman L. William Seidman. "We want to get as close to reality as we can, given the judgment involved."

Many critics say that lax or inconsistent actions by banking regulators allowed problems to multiply in the savings and loan industry until it went into a collapse that is now estimated to cost taxpayers hundreds of billions of dollars to clean up. Bankers and others have charged that in response to the S&L debacle, regulators became too harsh.

Clarke said it is his hope to provide better public information about the condition of each bank by changing the way in which some loans are classified. Clarke said he believes current procedures have led many financial analysts who advise investors about the health of institutions to take an overly dim view of their condition.

The value of bank stocks has been hammered this year as their losses and the number of soured loans have risen. With their stock prices so low, many institutions find it difficult to sell new shares to replace the money used to cover the losses from uncollectable loans.

The key change likely to be made early next year, Clarke said, would allow banks to count loans that have gone bad and are renegotiated as being good loans. This technical change would allow banks to count as income any interest received on such a loan, which they now cannot. With more income, they would be in a position to make more loans.

In a restructured loan, a bank changes its terms, perhaps by lowering the interest rate, in the case of a borrower who can manage to pay most but not all of what is due. Many bankers would prefer to accept a smaller payment rather than take over the borrower's real estate or business, which often is the only alternative.

"We are trying to make sure that we have accounting rules that allow restructuring but {do} not allow bankers to hide their problems," Clarke said in an interview. "Bankers should be given credit for working with borrowers, so long as they are willing to acknowledge they have a problem loan."

Bankers and some state regulators, such as Roland Roberge, banking commissioner for the state of New Hampshire, have been urging such a change.

"If people can make a portion of their payment, and if these people are responsible people who can be relied upon, then I think we as regulators have to start telling the banks, 'Don't foreclose. Work with these people. Try to let time straighten out the bulk of the problem,' " Roberge said.

"If you foreclose, the banks end up with the real estate, and banks manage real estate very badly. If the bank then gets closed and the property goes to {the federal government}, it will be managed even worse. If you can keep the property in the hands of businesses or homeowners, everyone would be better off," Roberge said.

Work is just beginning on a second rules change involving the way in which the value of real estate used to secure a bank loan is determined. In New England and other weak real estate markets, bankers say property appraisals are being driven down by bank examiners who are insisting that they be based on prices set at foreclosure sales, often the only transactions taking place. The bankers maintain that prices paid at such forced sales are not a good indicator of the market value of similar properties.sw

"We had the same {appraisal} problem in the Southwest," where hundreds of banks failed following a collapse in real estate values, Clarke said. "You can look at whether you have a temporary impairment of the value or a permanent impairment of value. If you have a high-quality office building or a high-class residential development, you can make a case that these will return to a higher value when the economy straightens out. Raw land values will not."

Within a matter of weeks, the comptroller is also likely to make final changes now circulating among bankers in draft form that would spell out much more precisely how much money a bank must set aside to cover a potential loss on each loan. These changes are intended to make bankers much more aware of what examiners will be expecting in the way of provisions for future losses so that there will be fewer surprises, and fewer arguments, during an examination. The changes will also reduce the examiners' discretion in setting the size of a reserve they think is appropriate.