As one of the nation's bank supervisors, the Federal Reserve will make every effort to encourage banks to apply sound underwriting standards in their lending.

Weekdays, while they are working, the women leave their children at a private home nearby, said Ms. Caye, who works full time as a bank supervisor.

Real regulation is being imposed, including bank supervisors who are supposed to make sure that money is being lent to sound projects, rather than to cronies.

Her husband retired in 1994, but she continued to work as a bank supervisor.

Fozzi Moxey, a 62-year-old bank supervisor, was there for her 5-year-old granddaughter, Candace.

Merging the operations of big bank supervisors has not sat well with the heads of any of the regulatory agencies currently overseeing banking.

Almost as important were the hundreds of Fed economists, lawyers, bank supervisors, and market specialists who worked around the clock to craft creative solutions to every financial market challenge.

Joseph Schendelman, a former bank supervisor, said his facial scars have healed but he continued to see a psychologist twice a month.

The regulators told the committee that Citibank had improved its policies and that long-needed efforts were under way to improve cooperation among international bank supervisors on secrecy problems.

But when the flow of money through the accounts jumped sharply, lower-level bank supervisors who monitored the activity failed to notify their superiors, he said.