FACTBOX - FSA publishes 2008 Financial Risk Outlook

(Reuters) - Following are key points from the 2008 Financial Risk Outlook published on Tuesday by the Financial Services Authority, outlining five priorities.

1. Business models under strain as a result of market conditions

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"The structured finance vehicles that some firms have chosen to use over the last few years have had a material impact on their financial performance during stressed financial market conditions.

"The disappearance of some funding vehicles from the market, such as SIVs (structured investment vehicles) and conduits, will increase firms' cost of funding and may also lead to a reduction in risk dispersal.

"It may force some lenders to reduce the size of their mortgage businesses, which would have direct consequences for consumers and the real economy."

2. Firms may shift efforts away from conduct-of-business demands

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"The deterioration in economic and financial conditions in the second half of 2007 has placed increased financial pressures on firms. As financial conditions and the economy are likely to remain more difficult over the short term, these pressures will remain.