At the same time, the growth in trading activities has allowed banks to diversify their products and services. Of course, the customer also has the ability to shop around for the product that best meets the customer's risk management or investment needs at the best possible price. That is taking place as these customer needs have been growing and evolving. As you all know, traders provide a significant benefit to their banks by obtaining and providing first-hand knowledge of the current market levels, magnitudes and directions of movements in interest and exchange rates, as well as commodity and equity prices. This information is essential for making accurate pricing decisions.
Traders are also often the first to hear and spread market rumors.
These rumors can often be vital to an institution in monitoring and controlling its various risks. After the Barings episode last year, the OCC went to the largest national bank dealers and inquired about any problems with their risk management systems that episode had revealed. We also inquired as to whether they planned to make any changes in those systems. In response, one theme that was repeated was that many traders had heard rumors of the size of Barings positions on the exchange-traded markets and of potential problems with those positions well before Barings went under. However, this information had not been communicated to senior management and the corporate office.