Soros says Basel II banking pact should be abandoned

WASHINGTON (Reuters) - George Soros, chairman of Soros Fund Management, testified at a U.S. House Oversight and Government Reform Committee hearing on Thursday:

* Says new Basel banking pact should set stricter risk requirements, and that Basel II accord should be abandoned because it was "an aberration."

* Says financial crisis "was generated by the financial system itself," not outside factors.

* Says regulators should control credit, margin requirements, and minimum capital requirements for banks.

* Says a clearing mechanism should be regulated to minimize counter-party risks.

* Says U.S. should "beware of going overboard with regulation" even though excessive deregulation is at root of current financial crisis - Soros

* Says hedge funds use leverage, contribute to market instability in times like present conditions.