MEDIA ADVISORY


HOW TO PREVENT ANOTHER ORANGE COUNTY MELTDOWN?
BETTER DISCLOSURE RULES, NOT LIMITS ON DERIVATIVES,
SAY EXPERTS  

	A jolting $1.5 billion investment loss that pushed the
Orange County government investment fund into bankruptcy is the
latest and largest debacle in the trading of derivatives, those
complex instruments based on fast-changing interest rates, currency
values and commodities prices. During the past year other funds and
corporations have lost hundreds of millions of dollars betting
against other investors on the moves these would make.

	Can this exotic, high-velocity market be effectively
policed?  Mary Schapiro, the new head of the Commodity Futures
Trading Commission thinks it can and says that the CFTC will find
ways.

	Experts at the University of Virginia think the answer lies
in requiring portfolio managers to fully disclose the risks they're
taking to their trustees and clients, rather than new regulations on
derivatives themselves. For insights into the problem and how it can
best be dealt with, the following are available and may be contacted
by E-mail as well as by telephone:

	Richard F. De Mong, professor of commerce and director of
the Center for Financial Services Studies at U.Va.'s McIntire School
of Commerce, who has been following the Orange County situation for
the past two years and using it as a discussion point in his
classes. De Mong, a former bank executive, is the author of "New
Financial Instruments: A Descriptive Guide", published by the
Financial Analysts Research Foundation, and the textbook "Principles
of Financial Management". You can contact him by telephone at (804)
924-3227, or by E-mail at rfd@virginia.edu.

	Mark R. Eaker, professor of business administration at
U.Va.'s Darden School, which offers M.B.A. and ongoing executive
education programs, is the author of "International Diversification
and Hedging", and teaches a course in valuation risk management
strategy for corporate executives. You can contact him by telephone
at (804) 924-4811 or by E-mail at mre2r@virginia.edu.

	For other assistance, contact Tom Doran at (804) 924-6858 or
by E-mail at ted8f@virginia.edu.

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December 8, 1994