Enron Mail

Subject:New Risk Management Policy
Date:Thu, 23 Aug 2001 23:08:55 -0700 (PDT)

Enron Corp. and its subsidiaries (the "Company") are exposed to market, cre=
dit, operational and liquidity/funding risks in the normal course of its bu=
siness activities. The Enron Corp. Board of Directors approved a new Risk =
Management Policy (the "Policy") on August 14, 2001. This Policy establish=
es a framework under which the Company's exposure to risks shall be evaluat=
ed, managed and controlled, and pursuant to which capital will be allocated=
and preserved. The Policy focuses on four major types of risk: (a) market=
risk; (b) credit risk; © operational risk and (d) liquidity/funding risk=
. These risks shall be managed on a portfolio basis for standard transacti=
ons via various market risk limit structures and credit approval processes,=
and for non-standard transactions via the Transaction Approval Process and=
the Guarantee Approval Process. This Policy provides an overview of vari=
ous risk measurement tools and limits to be applied to these risks, and the=
roles and responsibilities for the key participants of the risk management=
framework. =20

Management and employees are responsible for complying with the risk manage=
ment policies and procedures addressed in this Policy, available at http://=
home.enron.com/resources. Following an initial transiton period, various i=
ndividuals within the key functions participating in the Company's risk man=
agement framework will be required to sign a Compliance Certificate, an exa=
mple of which is attached to the Policy as Appendix H.

If you have any questions, please contact Cassandra Schultz, cassandra.schu=
ltz@enron.com, 713-853-0429 who will put you in touch with the appropriate =
Risk Assessment & Control representative. Note: this is a confidential pol=
icy, not for distribution to anyone outside of the Company without specific=
authorization from the Chief Risk Officer.