WASHINGTON - Banks have significantly reduced their exposure to highly leveraged institutions since the near-collapse of the hedge fund Long Term Capital Management 17 months ago, according to a report released Tuesday by the Basel Committee on Banking Supervision.

The report, based on an informal survey by banking supervisors in the Group of 10 leading industrialized countries, also urged banks and their regulators to "lock in and further strengthen improvements" in the way risks associated with lending to highly leveraged institutions are measured and managed.

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