The Office of the Comptroller of the Currency issued guidelines Monday that are designed to reduce bank losses on emerging markets trading and loans to hedge funds.

The 16-page bulletin, sent to national bank executives and the agency's examiners, concluded that some losses are the result of flaws in risk management systems. But other problems stem from blind faith in borrowers such as Long Term Capital Management or irresponsible reactions to competitive pressures, the agency said.

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