W RITTEN investment policies have become a lively topic now that the Comptroller of the Currency has joined the Federal Reserve Banks, the Federal Deposit Insurance Corporation and the American Bankers Association in advocating that banks establish one. At present, however, only a small minority of the nation's banksperhaps as few as 10 per cent-have such a written policy. Of the banks in the U.S., 14,300 have less than $300 million in deposits, hence are unlikely to have a full-time, experienced investment officer. Investment activity in these banks is a secondary responsibility of the president, cashier or other officer, and often receives inadequate attention. If they exist, their written investment policies typically consist of two or three pages of general goals and objectives, outlining few restrictions if any, and perhaps a statement of strategy to be followed during the current year. In many of these banks investment policy is strongly influenced by visiting investment bankers. It is safe to say that written investment policies play an unimportant role in such banks. There are, however, good reasons for having a written investment policy. It fixes responsibility and delegates authority for making investments. It states bank objectives and provides guidelines for carrying them out (including, sometimes, specification of acceptable securities and maturities). It integrates the bank's investment activity with its lending and other policies. Investing is complementary to other bank activity and, since consideration of total activity should properly precede development of an investment policy, the establishment of a written investment policy should promote management development of a comprehensive asset and liability policy. There could be few objections to having a written investment policy other than the fact that one might be unnecessary. When investment policy is made at the top, and represents a key ingredient in total asset and liability planning, a written policy may be irrelevant. On the other hand, if investments are a stepchild operation, separated from the main body of bank planning, writing down a policy will not cure the problem. Problems most often occur where an investment officer (investment department) goes his (its) own way, oblivious to the rest of the bank. Writing an investment policy is not easy. On one hand, a policy that is too vague and general will serve no purpose. On the other, a policy that is too specific and restrictive may have a negative effect on bank earnings. Bank investment officers usually prefer general guidelines that give them wide latitude in carrying out their duties. Bank managements and boards of directors, however, prefer specific statements, which they hope will preclude unpleasant surprises. Securities dealers, municipalities, bank managements, boards of directors and shareholders