Five U.S. federal regulatory agencies today issued a final statement on the complex structured finance activities of financial institutions.

The statement, which 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, 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.

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 institutions,” they note.