WASHINGTON -- A House subcommittee has asked the General Accounting Office to determine how well broker-dealers and other financial institutions manage the risks associated with derivative products, with the idea of possibly holding hearing on the issue next year.

Rep. Edward J. Markey, chairman of the House Energy and Commerce Committee's telecommunications and finance subcommittee, asked for the report in a letter sent last week to U.S. Comptroller Charles A. Bowsher, the head of the GAO, Congress's investigative arm.

Rep. Markey, D-Mass., said in the letter that while the new and complex derivatives market has grown dramatically in recent years, the knowledge of how to manage and oversee the risks of derivative products may not have kept pace.

"This potential lack of knowledge may be concealing an overall risk to the U.S. financial system," he said.

He asked the General Accounting Office to "identify the nature and extent of the use of derivative products" as well as whether the institutions using these products are adequately managing the related risks.

"The subcommittee would be particularly interested in any risks to broker-dealer holding company systems" that could affect provisions of a 1990 law that permit the Securities and Exchange Commission to monitor the overall financial exposure of such systems, he said.

Rep. Markey also asked the GAO to "identify any regulatory inconsistencies or gaps in the regulation among the dealers and users of these products." He said the agency should consider whether U.S. regulators can learn anything from foreign regulators regarding derivative products.

"The subcommittee believes it is possible that, if not properly managed and regulated, the use of these products could adversely affect the U.S. financial system," he wrote.

The GAO report, a subcommittee aide said, will broadly cover the derivatives market, including such products as interest rate swaps, foreign currency swaps, forwards, and options in both the municipal and corporate arenas.

The subcommittee does not expect the General Accounting Office to complete its work until the summer of 1993, the aide said, adding that the final product could be either a written report or testimony for hearings.

The subcommittee's interest in derivatives stems from some work that the GAO had done at its own initiative and also from the subcommittee's longstanding concerns about the stability of the securities and bond markets, the aide said.

The subcommitte played a major role in Congress's enactment of 1990, which expands the SEC's authority to deal with disruptions and trading halts in the securities markets.

That 1990 law contains risk assessment provisions that permit the SEC to obtain immediate financial and operating information from broker-dealer holding company systems.

The measure was a response to the October 1987 stock crash and other market disruptions, such as the mini market crash of November 1989 and the collapse of Drexel Burnham Lambert Inc.

The subcommittee's request for the GAO report comes as an increasing number of federal officials, such as E. Gerald Corrigan, president of the Federal Reserve Bank of New York, has raised concerns about the market impacts of derivative products.

Mr. Corrigan told bankers in February he was concerned that derivative products could introduce "new elements of risk or distortion into the marketplace" and on the balance sheets and income statements of financial and nonfinancial institutions.

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