New York State said Monday it would train and hire more  hedge fund specialists for its bank-examination force, and urged state   regulated banks to pay more attention to hedge fund operations.   
The department is looking to hire 35 examiners in the capital markets  area and 34 examiners in the internal controls area, to bolster its present   staff of 361 examiners.   
  
"Banks need to strengthen their risk management practices and examiners  need to improve their understanding of the risks posed by complex market   activities," Acting Superintendent of Banks Elizabeth McCaul wrote in a   report to the industry.     
Examiners need to be more proactive in identifying potential trouble  spots and learn more about the types of financial instruments banks are   using, the report said.   
  
Banks should implement "more robust" methods of obtaining financial  information from potential hedge fund partners, improve their stress   testing practices, and establish credit policies that are specifically   geared to hedge funds.