Sally / Beth,

As we discussed when I was in Houston I have put together a draft on Valuation Methodology Changes and Model Approval. I had a meeting arranged for today to go through my proposal with Ted Murphy and Tani Nath (she heads up research and structuring here in London) but Ted cancelled at the last minute (again). Tani and I met and are broadly in agreement, but before we can go any further we need Ted's input. He is now away for 2 1/2 weeks so there is going to be no further progress on this front.

In the mean time I would appreciate your comments on what I have put together. I would prefer it if it is not circulated around Houston at this stage until I can accurately say that Ted is happy from a global RAC perspective. Likewise I still need to get Houston research comfortable but I am going to wait until Ted has had a chance to add his feedback so I can at least say that it is only Houston research that is outstanding. Others will also need to be consulted (and I would like to agree a list of key people with you) but I can't see their being any real contention. Can you ?

I am assuming that resourcing is likely to be an issue for you in Houston (and it may well be here too) and this has been added to the outstanding list. I am envisaging that some of the risk management work could be completed as part of the curve validation 

If there are any questions or feedback please let me know.

James