[Federal Register Volume 63, Number 167 (Friday, August 28, 1998)]
[Rules and Regulations]
[Pages 46118-46122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23077]
[[Page 46117]]
_______________________________________________________________________
Part V
Department of the Treasury
Office of the Comptroller of the Currency
12 CFR Part 4
Federal Reserve System
12 CFR Part 211
Federal Deposit Insurance Corporation
12 CFR Part 347
_______________________________________________________________________
Extended Examination Cycle for U.S. Branches and Agencies of Foreign
Banks; Final Rule
Federal Register / Vol. 63, No. 167 / Friday, August 28, 1998 / Rules
and Regulations
[[Page 46118]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 4
[Docket No. 98-11]
RIN 1557-AB60
FEDERAL RESERVE SYSTEM
12 CFR Part 211
[Regulation K; Docket No. R-1012]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 347
RIN 3064-AC15
Extended Examination Cycle for U.S. Branches and Agencies of
Foreign Banks
AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of
Governors of the Federal Reserve System; and the Federal Deposit
Insurance Corporation.
ACTION: Interim rule with request for comment.
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SUMMARY: The Office of the Comptroller of the Currency (OCC), the Board
of Governors of the Federal Reserve System (Board), and the Federal
Deposit Insurance Corporation (FDIC) (collectively, the Agencies) are
issuing this joint interim rule with request for comment to implement
the provisions related to an extended examination cycle for U.S.
branches and agencies of foreign banks set out in section 2214 of the
Economic Growth and Regulatory Paperwork Reduction Act of 1996
(EGRPRA). United States branches and agencies of foreign banks with
total assets of $250 million or less are eligible to be considered for
the 18-month examination cycle if they meet the qualifying criteria set
out in this interim rule. The interim rule reduces the regulatory
burden associated with more frequent on-site examinations for certain
small U.S. branches and agencies of foreign banks.
DATES: This interim rule is effective August 28, 1998. Comments must be
received by October 27, 1998.
ADDRESSES: Comments should be directed to: OCC: Communications
Division, Office of the Comptroller of the Currency, 250 E Street SW.,
Washington, DC 20219, Attention: Docket No. 98-11. Comments will be
available for public inspection and photocopying at the same location.
Comments may also be sent by facsimile transmission to (202) 874-5274
or by electronic mail to regs.comments@occ.treas.gov.
Board: Jennifer J. Johnson, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, NW.,
Washington, DC 20551, and refer to Docket No. R-1012. Comments
addressed to Ms. Johnson may also be delivered to the Board's mail room
between 8:45 a.m. and 5:15 p.m., and to the security control room
outside of those hours. Both the mail room and the security control
room are accessible from the courtyard entrance on 20th Street between
Constitution Avenue and C Street, NW. Comments may be inspected in room
MP-500 between 9:00 a.m. and 5:00 p.m., except as provided in Section
261.14 of the Board's Rules Regarding the Availability of Information.
FDIC: Robert E. Feldman, Executive Secretary, Attention: Comments/
OES, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429. Comments may be hand delivered to the guard
station at the rear of the 550 17th Street Building (located on F
Street) on business days between 7:00 a.m. and 5:00 p.m. (Fax number
(202) 898-3838; Internet address: comments@fdic.gov) Comments may be
inspected and photocopied in the FDIC Public Information Center, Room
100, 801 17th Street, NW., Washington, DC between 9:00 a.m. and 4:30
p.m. on business days.
FOR FURTHER INFORMATION CONTACT:
OCC: Martha Clarke, Senior Attorney, International Activities (202/
874-0680); or Howard Blacker, Senior International Advisor,
International Banking & Finance (202/874-4730).
Board: Norah M. Barger, Assistant Director (202/452-2402), or
Joseph J. Sciortino, Supervisory Financial Analyst (202/452-2294),
Division of Banking Supervision and Regulation; or Sandra Richardson,
Managing Senior Counsel (202/452-6406) or Jonathan D. Stoloff, Senior
Attorney (202/452-3269), Legal Division.
FDIC: Karen Walter, Chief, International, Division of Supervision
(202/898-3540); or Mark Mellon, Counsel, Regulation and Legislation
Section, Legal Division (202/898-3854).
SUPPLEMENTARY INFORMATION:
Background
The International Banking Act of 1978 (the IBA),1 as
amended by the Foreign Bank Supervision Enhancement Act of
1991,2 subjected U.S. branches and agencies of foreign banks
to a 12-month examination cycle. Section 2214 of the Economic Growth
and Regulatory Paperwork Reduction Act of 1996 (EGRPRA) 3
amended the IBA to provide that U.S. branches and agencies of foreign
banks shall be subject to on-site examination as frequently as a
national or state bank would be by its appropriate federal banking
agency.
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\1\ Pub. L. 95-369, 92 Stat. 607.
\2\ Pub. L. 102-242, 105 Stat. 2286.
\3\ Pub. L. 104-208, 110 Stat. 3009 (section 2214 is codified at
12 U.S.C. 3105(c)(1)).
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In general, national and state banks must be examined every 12
months. However, section 111 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 4 authorized an 18-month
examination cycle for certain national and state banks with a composite
rating of 1 under the Uniform Financial Institutions Rating System
(UFIRS) and total assets of $100 million or less. Section 306 of the
Riegle Community Development and Regulatory Improvement Act of 1994
5 expanded the availability of the 18-month examination
cycle to certain national and state banks with a composite rating of 1
under UFIRS and total assets of $250 million or less, as well as to
certain national and state banks with a composite rating of 2 under
UFIRS and total assets of $100 million or less. Section 2221 of EGRPRA
6 provided that anytime after September 23, 1996, U.S. bank
supervisory agencies could extend the 18-month examination frequency
cycle to certain national and state banks with a composite rating of 2
and total assets of $250 million or less. Effective April 2, 1998, the
Agencies issued a final rule that extended the examination cycle to 18
months for certain national and state banks that satisfy the
requirements of section 2221 of EGRPRA.7 To be eligible for
the extended cycle, the national or state bank must:
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\4\ Pub. L. 102-242, 105 Stat. 2236 (section 111 is codified at
12 U.S.C. 1820(d)).
\5\ Pub. L. 103-325, 108 Stat. 2160.
\6\ Section 2221 is codified at 12 U.S.C. 1820(d)(10).
\7\ 63 FR 16377 (April 2, 1998).
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(a) Have total assets of $250 million or less;
(b) Be rated a composite 2 or better under the UFIRS;
(c) Be well capitalized;
(d) Be well managed;
(e) Not be subject to a formal enforcement action; and
(f) Not have experienced a change of control during the preceding
12-month period in which a full-scope, on-site examination would have
been required but for the extended cycle.
[[Page 46119]]
In view of the changes to the examination frequency of national and
state banks, the Agencies are issuing an interim rule that similarly
extends the examination cycle for certain U.S. branches and agencies of
foreign banks. Accordingly, U.S. branches and agencies of foreign banks
with total assets of $250 million or less may be considered for an 18-
month examination cycle provided that they meet the eligibility
criteria described in this interim rule. The Agencies are seeking
comment on any aspect of this rule.
The Agencies believe that an extended examination cycle for
eligible U.S. offices of foreign banks will permit the Agencies to
focus their resources on those offices that present the most immediate
supervisory concern, while concomitantly reducing the regulatory burden
on smaller offices that do not pose a similar level of supervisory
concern. The Agencies will continue to use off-site supervision
techniques, including the submission of regulatory reports, to monitor
the condition and any changes in the risk profile of offices scheduled
to be examined on the extended 18-month cycle. Each agency retains
authority to examine the offices of a foreign bank as frequently as the
agency deems necessary.
Description of the Interim Rule
Under this interim rule, a U.S. branch or agency of a foreign bank
is eligible to be considered for an 18-month examination cycle if the
office meets the criteria listed below and if there are no other
factors that cause the appropriate federal banking agency to examine
the branch or agency more frequently. To qualify for an 18-month
examination cycle, the U.S. branch or agency of a foreign bank must:
(a) Have total assets of $250 million or less;
(b) Have received a composite ROCA supervisory rating of 1 or 2 at
its most recent examination; 8
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\8\ The supervisory rating system for U.S. branches and agencies
of foreign banks is referred to as ROCA. The four components of ROCA
are: risk management, operational controls, compliance, and asset
quality.
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(c) Satisfy the requirements of either the following paragraph (1)
or (2):
(1) The foreign bank's most recently reported capital adequacy
position consists of, or is equivalent to, Tier 1 and risk-based
capital ratios of at least 6 percent and 10 percent, respectively, on a
consolidated basis; or
(2) The branch or agency has maintained on a daily basis over the
past three quarters, eligible assets (determined consistent with
applicable federal and state law) in an amount not less than 108
percent of the preceding quarter's average third party liabilities and
sufficient liquidity is currently available to meet its obligations to
third parties;
(d) Not be subject to a formal enforcement action or order by the
Board, FDIC or OCC; and
(e) Not have experienced a change in control during the preceding
12-month period in which a full-scope, on-site examination would have
been required but for the extended cycle.
Each agency retains the authority to examine a U.S. branch or
agency of a foreign bank as frequently as the agency deems necessary.
Factors that the Agencies will consider when deciding whether more
frequent examinations are necessary include, but are not limited to,
whether: (a) Any of the individual components of the ROCA rating of the
U.S. office is rated 3 or worse; (b) the results of any off-site
supervision indicate a deterioration in the condition of the office;
(c) the size, relative importance, and role of a particular office when
reviewed in the context of the foreign bank's entire U.S. operations
otherwise necessitates an annual examination (including, for example,
whether the office generates a significant level of assets that are
booked elsewhere); and (d) the condition of the foreign bank itself
gives rise to such a need. In general, the Agencies will make their
determination whether to apply the 18-month examination cycle to a
particular U.S. branch or agency based on the overall risk assessment
for that office, as well as the factors noted herein.
Section 2214 of EGRPRA directs that the U.S. branches and agencies
of foreign banks should be subject to on-site examinations as often as
U.S. banks. The criteria for determining eligibility of U.S. offices of
a foreign bank for an expanded examination cycle differ in certain
respects from the criteria applicable to U.S. banks for this purpose.
These differences are necessary to adjust for the obvious structural
differences that exist between U.S. banks and U.S. offices of foreign
banks (e.g., the U.S. offices of foreign banks often constitute only a
small part of foreign banks' worldwide operations and the role of the
Agencies with regard to the U.S. offices is limited to that of host
country supervisor), as well as the supervisory implications that flow
from these basic structural differences.
The Agencies will use a number of criteria as a proxy for the well-
managed criterion applicable to U.S. banks, including the ROCA
component and composite ratings, the existence of any formal
enforcement action or order issued by an agency, and the other
discretionary standards described above. With regard to the well-
capitalized criterion applicable to U.S. banks for these purposes, the
Agencies will take into account the foreign bank's capital adequacy
ratios, as well as, in appropriate circumstances, whether the U.S.
offices of the foreign bank have sufficient eligible assets and
liquidity to meet their obligations to third parties. The Agencies
believe that evaluating the U.S. branches and agencies of foreign banks
on the basis of the criteria described above for purposes of
determining eligibility for an expanded examination cycle is consistent
with the requirements of section 2214 of EGRPRA.
Effective Date of Interim Rule
The Agencies find good cause for issuing this interim rule without
prior notice and the opportunity for comment, as well as for dispensing
with the 30-day delayed effective date ordinarily prescribed by the
Administrative Procedure Act (APA), 5 U.S.C. 551 et seq. The interim
rule confers a benefit on certain small U.S. branches and agencies of
foreign banks by reducing the regulatory burden associated with more
frequent on-site examinations. Conversely, this interim rule does not
increase the frequency of examinations or otherwise increase the
regulatory burden for any U.S. branch or agency of a foreign bank. Such
institutions, therefore, are not adversely affected by the interim
rule. Under these circumstances, the Agencies conclude that prior
notice and comment procedures are unnecessary and would be contrary to
the public interest. 5 U.S.C. 553(b)(B).
In addition, the Agencies have determined that this interim rule
relates to examination schedules, which are a matter of internal agency
procedure rather than a rule of substantive effect on bank activities
and authority. See Donovan v. Wollaston Alloys, Inc., 695 F.2d 1, 9
(1st Cir. 1982). Determining when a regulated institution is to be
examined is based, in part, on examiner availability, the Agencies'
need to plan examiner time in advance, and other issues relevant to the
internal operations of the Agencies. Therefore, this interim rule is
exempt from the APA's public notice requirement. 5 U.S.C. 553(b)(3)(A).
Regulatory Flexibility Act
An initial regulatory flexibility analysis under the Regulatory
Flexibility Act is only required whenever an agency is required to
[[Page 46120]]
publish a general notice of proposed rulemaking for any proposed rule.
5 U.S.C. 603. As noted previously, the Agencies have determined that
this proposed rulemaking is exempt from the requirements of the APA.
Accordingly, an initial regulatory flexibility analysis is not
required.
Even if the Act were to apply, the interim rule will not have a
significant economic impact on a substantial number of small entities.
The interim rule will reduce regulatory burden on eligible U.S.
branches and agencies of foreign banks with assets of $250 million or
less. In addition, those entities that are not eligible for the
exemption from the statutorily prescribed 12-month examination cycle
will not be adversely affected by the interim rule.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3506), the Agencies have determined that no collections of information
pursuant to the Paperwork Reduction Act are contained in this interim
rule.
OCC Executive Order 12866 Statement
The OCC has determined that this interim rule is not a significant
regulatory action under Executive Order 12866.
OCC Unfunded Mandates Act of 1995 Statement
Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L.
104-4, 109 Stat. 48 (March 22, 1995) (Unfunded Mandates Act), requires
that an agency prepare a budgetary impact statement before promulgating
a rule that includes a federal mandate that may result in the
expenditure by state, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year. If a
budgetary impact statement is required, section 205 of the Unfunded
Mandates Act also requires an agency to identify and consider a
reasonable number of regulatory alternatives before promulgating a
rule. Because the OCC has determined that this interim rule will not
result in expenditures by state, local, and tribal governments, in the
aggregate, or by the private sector, of more than $100 million in any
one year, the OCC has not prepared a budgetary impact statement or
specifically addressed the regulatory alternatives considered. As
discussed in the preamble, this interim rule will have the effect of
reducing regulatory burden on certain institutions.
List of Subjects
12 CFR Part 4
Banks, banking, Freedom of information, Organization and functions
(Government agencies), Reporting and recordkeeping requirements.
12 CFR Part 211
Exports, Federal Reserve System, Foreign banking, Holding
companies, Investments, Reporting and recordkeeping requirements.
12 CFR Part 347
Banks, banking, Bank deposit insurance, Bank mergers, Credit,
Foreign banking, Foreign branches, Foreign investments, Insured
branches, International lending, International operations, Investments,
Reporting and recordkeeping requirements.
Office of the Comptroller of the Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set forth in the joint preamble, part 4 of chapter
I of title 12 of the Code of Federal Regulations is amended as follows:
PART 4--ORGANIZATION AND FUNCTIONS, AVAILABILITY AND RELEASE OF
INFORMATION, CONTRACTING OUTREACH PROGRAM
1. The authority citation for part 4 is revised to read as follows:
Authority: 12 U.S.C. 93a. Subpart A also issued under 5 U.S.C.
552; 12 U.S.C. 481, 1820(d), and 3105(c)(1). Subpart B also issued
under 5 U.S.C. 552; E.O. 12600 (3 CFR, 1987 Comp., p. 235). Subpart
C also issued under 5 U.S.C. 301, 552; 12 U.S.C. 481, 482, 1821(o),
1821(t); 18 U.S.C. 641, 1905, 1906; 31 U.S.C. 9701. Subpart D also
issued under 12 U.S.C. 1833e.
2. In Subpart A, the heading of Sec. 4.6 is revised to read as
follows:
Sec. 4.6 Frequency of examination of national banks.
3. In Subpart A, a new Sec. 4.7 is added to read as follows:
Sec. 4.7 Frequency of examination of Federal agencies and branches.
(a) General. The OCC examines Federal agencies and Federal branches
(as these entities are defined in Sec. 28.11 (h) and (i), respectively,
of this chapter) pursuant to the authority conferred by 12 U.S.C.
3105(c)(1)(C). Except as noted in paragraph (b) of this section, the
OCC will conduct a full-scope, on-site examination of every Federal
branch and agency at least once during each 12-month period.
(b) 18-month rule for certain small institutions--(1) Mandatory
standards. The OCC may conduct a full-scope, on-site examination at
least once during each 18-month period, rather than each 12-month
period as provided in paragraph (a) of this section, if the Federal
branch or AGENCY:
(i) Has total assets of $250 million or less;
(ii) Has received a composite ROCA supervisory rating (which rates
risk management, operational controls, compliance, and asset quality)
of 1 or 2 at its most recent examination;
(iii) Satisfies the requirements of either the following paragraph
(b)(1)(iii) (A) or (B):
(A) The foreign bank's most recently reported capital adequacy
position consists of, or is equivalent to, Tier 1 and total risk-based
capital ratios of at least 6 percent and 10 percent, respectively, on a
consolidated basis; or
(B) The branch or agency has maintained on a daily basis, over the
past three quarters, eligible assets (determined consistent with
applicable federal and state law) in an amount not less than 108
percent of the preceding quarter's average third party liabilities and
sufficient liquidity is currently available to meet obligations to
third parties;
(iv) Is not subject to a formal enforcement action or order by the
Federal Reserve Board, the Federal Deposit Insurance Corporation, or
the OCC; and
(v) Has not experienced a change in control during the preceding
12-month period in which a full-scope, on-site examination would have
been required but for this section.
(2) Discretionary standards. In determining whether a Federal
branch or agency is eligible for an 18-month examination cycle pursuant
to this paragraph (b), the OCC may consider additional factors,
including, but not limited to, whether:
(i) Any of the individual components of the ROCA rating of the
Federal branch or agency is rated ``3'' or worse;
(ii) The results of any off-site supervision indicate a
deterioration in the condition of the Federal branch or agency;
(iii) The size, relative importance, and role of a particular
office when reviewed in the context of the foreign bank's entire U.S.
operations otherwise necessitate an annual examination; and
(iv) The condition of the foreign bank gives rise to such a need.
(c) Authority to conduct more frequent examinations. Nothing in
paragraph (a) or (b) of this section limits the authority of the OCC to
examine any
[[Page 46121]]
Federal branch or agency as frequently as the OCC deems necessary.
Dated: August 12, 1998.
Julie L. Williams,
Acting Comptroller of the Currency.
Authority and Issuance
For reasons set forth in the joint preamble, the Board amends 12
CFR Part 211 as set forth below:
PART 211--INTERNATIONAL BANKING OPERATIONS (REGULATION K)
1. The authority citation for part 211 continues to read as
follows:
Authority: 12 U.S.C. 221 et seq., 1818, 1835a, 1841 et seq.,
3101 et seq., and 3901 et seq.
Subpart B--Foreign Banking Organizations
2. In Subpart B, Sec. 211.26 is amended by revising paragraph (c)
to read as follows:
Sec. 211.26 Examination of offices and affiliates of foreign banks.
* * * * *
(c) Frequency of on-site examination--(1) General. Each branch or
agency of a foreign bank shall be examined on-site at least once during
each 12-month period (beginning on the date the most recent examination
of the office ended) by:
(i) The Board;
(ii) The FDIC, if the branch of the foreign bank accepts or
maintains insured deposits;
(iii) The Comptroller, if the branch or agency of the foreign bank
is licensed by the Comptroller; or
(iv) The state supervisor, if the office of the foreign bank is
licensed or chartered by the state.
(2) 18-month cycle for certain small institutions--(i) Mandatory
standards. The Board may conduct a full-scope, on-site examination at
least once during each 18-month period, rather than each 12-month
period as required in paragraph (c)(1) of this section, if the branch
or Agency:
(A) Has total assets of $250 million or less;
(B) Has received a composite ROCA supervisory rating (which rates
risk management, operational controls, compliance, and asset quality)
of 1 or 2 at its most recent examination;
(C) Satisfies the requirement of either the following paragraph
(c)(2)(i)(C) (1) or (2):
(1) The foreign bank's most recently reported capital adequacy
position consists of, or is equivalent to, Tier 1 and total risk-based
capital ratios of at least 6 percent and 10 percent, respectively, on a
consolidated basis; or
(2) The branch or agency has maintained on a daily basis, over the
past three quarters, eligible assets (determined consistent with
applicable federal and state law) in an amount not less than 108
percent of the preceding quarter's average third party liabilities and
sufficient liquidity is currently available to meet its obligations to
third parties;
(D) Is not subject to a formal enforcement action or order by the
Board, FDIC, or OCC; and
(E) Has not experienced a change in control during the preceding
12-month period in which a full-scope, on-site examination would have
been required but for this section.
(ii) Discretionary standards. In determining whether a branch or
agency of a foreign bank is eligible for an 18-month examination cycle
pursuant to this paragraph (c)(2), the Board may consider additional
factors, including, but not limited to whether:
(A) Any of the individual components of the ROCA supervisory rating
of a branch or agency of a foreign bank is rated ``3'' or worse;
(B) The results of any off-site surveillance indicate a
deterioration in the condition of the office;
(C) The size, relative importance, and role of a particular office
when reviewed in the context of the foreign bank's entire U.S.
operations otherwise necessitate an annual examination; and
(D) The condition of the foreign bank gives rise to such a need.
(3) Authority to conduct more frequent examinations. Nothing in
paragraphs (c) (1) and (2) of this section limits the authority of the
Board to examine any U.S. branch or agency of a foreign bank as
frequently as it deems necessary.
By order of the Board of Governors of the Federal Reserve
System, August 24, 1998.
Jennifer J. Johnson,
Secretary of the Board.
Authority and Issuance
For the reasons set forth in the joint preamble, the Board of
Directors of the FDIC amends part 347 of chapter III of title 12 of the
Code of Federal Regulations as follows:
PART 347--INTERNATIONAL BANKING
1. The authority citation for part 347 continues to read as
follows:
Authority: 12 U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, 3103,
3104, 3105, 3108; Title IX, Pub. L. 98-181, 97 Stat. 1153.
2. Section 347.214 is added to subpart B to read as follows:
Sec. 347.214 Examination of branches of foreign banks.
(a) Frequency of on-site examination. Each branch or agency of a
foreign bank shall be examined on-site at least once during each 12-
month period (beginning on the date the most recent examination of the
office ended) by:
(1) The Board of Governors of the Federal Reserve System (Board);
(2) The FDIC, if the branch of the foreign bank accepts or
maintains insured deposits;
(3) The Office of the Comptroller of the Currency (OCC), if the
branch or agency of the foreign bank is licensed by the Comptroller; or
(4) The state supervisor, if the office of the foreign bank is
licensed or chartered by the state.
(b) 18-month cycle for certain small institutions--(1) Mandatory
standards. The FDIC may conduct a full-scope, on-site examination at
least once during each 18-month period, rather than each 12-month
period as provided in paragraph (a) of this section, if the branch or
Agency:
(i) Has total assets of $250 million or less;
(ii) Has received a composite ROCA supervisory rating (which rates
risk management, operational controls, compliance, and asset quality)
of 1 or 2 at its most recent examination;
(iii) Satisfies the requirement of either the following paragraph
(b)(1)(iii) (A) or (B):
(A) The foreign bank's most recently reported capital adequacy
position consists of, or is equivalent to, Tier 1 and total risk-based
capital ratios of at least 6 percent and 10 percent, respectively, on a
consolidated basis; or
(B) The branch or agency has maintained on a daily basis, over the
past three quarters, eligible assets (determined consistent with
applicable federal and state law) in an amount not less than 108
percent of the preceding quarter's average third party liabilities and
sufficient liquidity is currently available to meet its obligations to
third parties;
(iv) Is not subject to a formal enforcement action or order by the
Board, FDIC, or the OCC; and
(v) Has not experienced a change in control during the preceding
12-month period in which a full-scope, on-site examination would have
been required but for this section.
(2) Discretionary standards. In determining whether a branch of a
foreign bank is eligible for an 18-month examination cycle pursuant to
this
[[Page 46122]]
paragraph (b), the FDIC may consider additional factors, including, but
not limited to, whether:
(i) Any of the individual components of the ROCA supervisory rating
of a branch of a foreign bank is rated ``3'' or worse;
(ii) The results of any off-site monitoring indicate a
deterioration in the condition of the branch;
(iii) The size, relative importance, and role of a particular
branch when reviewed in the context of the foreign bank's entire U.S.
operations otherwise necessitate an annual examination; and
(iv) The condition of the parent foreign bank gives rise to such a
need.
(c) Authority to conduct more frequent examinations. Nothing in
paragraphs (a) and (b) of this section limits the authority of the FDIC
to examine any U.S. branch or agency of a foreign bank as frequently as
it deems necessary.
By order of the Board of Directors.
Dated at Washington, DC, this 7th day of July, 1998.
Federal Deposit Insurance Corporation.
James D. LaPierre,
Deputy Executive Secretary.
[FR Doc. 98-23077 Filed 8-27-98; 8:45 am]
BILLING CODE 4810-33-P, 6210-01-P, 6714-01-P