BANKING & FINANCE - July 2, 1996

Bankers Trust Problems Blamed on Inadequate Oversight: An independent report on Bankers Trust New York Corp.’s derivatives business criticized the bank for years of poor management, weak controls and other problems that led to charges of deception by regulators and big customers. The report, ordered in 1994 by regulators, concentrates on an inability by senior executives of the nation’s eighth-largest bank to assure its controls over traders and salesmen were enforced. It recommended that Bankers Trust discipline 10 employees, who it didn’t name. The review stopped short of claiming the bank conspired to cheat customers, saying its problems “were not due to any institutional effort by BT to defraud, mislead or to otherwise take advantage of its customers.” The report recommended changes. Bank officials said many have already been put into place.