Article: Agencies issue policy statement on financial support to advised investment funds.(Announcements)(Brief Article)

The federal banking and thrift supervisory agencies issued a policy statement on January 5, 2004, alerting financial institutions to the safety and soundness and legal issues involved in providing financial support to investment funds advised by the institution or its subsidiaries or affiliates.

The statement is prompted by recent market developments, including market volatility, the continued low-interest rate environment, and operational and corporate governance weaknesses. It warns that investment advisory services can pose material risks to a financial institution's liquidity, earnings, capital, and reputation and can harm investors, if the associated risks ...

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