Nearly all countries require banks to maintain internal controls and conduct periodic audits of their foreign operations, according to a study just released by the Institute of International Bankers.

The 158-page study did not compare the systems from country to country. But a review of each nation's standards shows that most require banks to follow the country's generally accepted accounting standards.

The report noted that Canadian banks must adopt formal risk-management policies and maintain independent internal auditors.

U.S. banks must audit their internal controls to ensure that they work. Examiners review these controls and the competency of the bank's auditors.

The study, Global Survey 1996, found that only the United States, Singapore, Japan, and Korea use firewalls to separate investment and commercial banking. Most other countries permit banks to underwrite securities directly.

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