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Joint Press Release

Board of Governors of the Federal Reserve System
Federal Deposit Insurance Corporation
Office of the Comptroller of the Currency
Office of Thrift Supervision
Securities and Exchange Commission

For immediate release

January 5, 2007

Agencies Issue Final Statement Concerning Elevated Risk Complex Structured
Finance Activities
Five federal agencies on Friday issued a final statement on the complex structured finance
activities of financial institutions. The statement describes the types of internal controls and
risk management procedures that should help financial institutions identify, manage, and
address the heightened legal and reputational risks that may arise from certain complex
structured finance transactions (CSFTs).
The final statement is substantially similar to the revised statement issued for comment in
May 2006, but has been modified in certain respects to address comments received on the
revised statement. Like the proposal issued in May, the final statement takes a risk- and
principles-based approach to addressing the risks CSFTs may pose to institutions and
focuses on those CSFTs that may present elevated levels of legal or reputational risk to
The final statement was issued by the Board of Governors of the Federal Reserve System,
the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency,
the Office of Thrift Supervision and the Securities and Exchange Commission. The
statement represents supervisory guidance for institutions supervised by the four banking
agencies and a policy statement for institutions supervised by the Securities and Exchange
Commission. Because the statement focuses on sound practices related to elevated risk
CSFTs -- transactions that typically are conducted by a limited number of large financial
institutions -- it will not affect or apply to the vast majority of financial institutions,
including most small institutions.
The final statement is attached and will be published in the Federal Register shortly.
Federal Register Notice 83 KB PDF | TEXT
Media Contacts:
Federal Reserve Deborah Lagomarsino (202) 452-2955
David Barr
(202) 898-6992
Kevin Mukri
(202) 874-5770


Kevin Petrasic
John Heine

(202) 906-6677
(202) 551-4120

2007 Banking and consumer regulatory policy
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Last update: January 5, 2007