A financial expert who was hired by the Russians to look into the financial standing of the Bank of New York Mellon, Kenneth Thomas, has launched a letter-writing and telephone campaign to warn regulators that the bank made a mistake is deciding against setting up a special contingency reserve for potential damages related to the case.

“Assuming a $22.5 billion judgment, which could reportedly happen as early as June 30, 2008, and assuming just a portion of it is enforced in the more than 90 countries in which the company deals, this could have a significant adverse impact on it in several areas such as capital, liquidity, and reputation,” Mr. Thomas wrote in a letter to the Federal Reserve chairman, Ben Bernanke, last week. “For example, if 25% of the $22.5 billion judgment is ultimately enforced, this would be $5.6 billion or about one-third of the company’s $17.2 billion of capital as of March 31. Even assuming a 10% outcome, we are talking about $2.25 billion or more than 10% of their capital.”

A spokeswoman for the Federal Reserve declined to comment on the correspondence.

Accounting rules dictate that a company doesn’t need to set aside money for a potentially damaging court ruling unless the loss is “probable” — more than a 50% chance it will happen — and unless it is possible to estimate what the damages are likely to be.

“The enforcement of any adverse judgment in this case is neither probable nor estimable, therefore a reserve would be inappropriate under the FASB accounting rules,” a bank spokesman, Jeep Bryant, said.