Structured notes have again taken a hit by banking regulators, this time being labeled inappropriate for many national bank investors by the OCC. The agencys warning marks the second time in as many weeks that derivative instruments have been targeted by regulators.

The Office of the Comptroller of the Currency warned the risks of these instruments are potentially too great for banks and bankers dabbling in the market should be able to explain how these notes accomplish the institutions strategic portfolio objectives.

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