WASHINGTON -- The Government Finance Officers Association called for tighter suitability standards for derivatives yesterday after warning that broker-dealers are aggressively marketing these products to states and localities without disclosing the associated risks.

In some cases, dealers are telling state and local officials that derivatives are safe, governmentguaranteed, and provide no risk of loss of principal, Alan McDougle, an association official, told the House Banking Committee at a heating held yesterday on derivatives losses.

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