BANKING & FINANCE - June 4, 1996

T-Bill Rates Rise: Interest rates on short-term Treasury securities rose in auction to the highest level since late last year. The Treasury Department sold $14.6 billion in three-month bills at an average discount rate of 5.09%, up from 5.03% last week. An additional $14.7 billion was sold in six-month bills at an average discount rate of 5.21%, up from 5.14%. The three-month bill rate was the highest since they sold for 5.15% on Dec. 18. The six-month bill rate was the highest since they averaged 5.25% on Nov. 27. The new discount rates understate the actual return to investors: 5.23% for three-month bills, with a $10,000 bill selling for $9,871.30, and 5.43% for a six-month bill selling for $9,736.60. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.70% last week from 5.59% the previous week. The next auction of two-year Treasury notes will be June 25; for five-year notes, June 26.