US regulators warn financial institutions on supporting affiliated investment funds

The US Federal and Thrift Supervisory agencies have issued a policy statement warning financial institutions to be cautious of material risks inherent in supporting affiliated investment funds.

In a joint statement released on January 5, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision warned 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 are not effectively controlled.

“Today's policy statement is prompted by recent market

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