Educational item banking presents observers with a considerable paradox. The development of test items from scratch is viewed as wasteful, a luxury in times of declining resources. On the other hand, item banking has failed to become a mature technology despite large amounts of money and the efforts of talented professionals. The question of which group is correct is the subject of this paper. A balance sheet presents the advantages and disadvantages of item banking. Cost estimates for developing item bank tests are compared to costs for conventional test development in order to develop guidelines for the cost-effective application of item banks. Particular attention is paid to the role innovative technologies such as microcomputers and videodiscs might play in item banking. The overall objective of this report is to provide a balanced report on the strengths and weaknesses of educational test item banking. (Author/PN)