ORDERS ISSUED UNDER INTERNATIONAL BANKING ACT.

E. Sun Commercial Bank, Limited Taipei, Taiwan

Order Approving Establishment of a Branch

E. Sun Commercial Bank, Limited ("Bank"), Taipei, Taiwan, a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 7(d) of the IBA (12 U.S.C. [sections] 3105(d)) to establish a state-licensed branch in Los Angeles, California. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank must obtain the approval of the Board to establish a branch in the United States.

Notice of the application, affording interested persons an opportunity to comment, has been published in a newspaper of general circulation in Los Angeles, California (San Gabriel Valley Tribune, July 12, 1999). The time for filing comments has expired, and the Board has considered the application and all comments received.

Bank, with total consolidated assets of approximately $6.3 billion, is a full-service commercial bank.(1) Its shares are publicly traded and widely held. Bank operates 37 branches and an overseas banking unit in Taiwan, and representative offices in The Philippines and Hong Kong. Bank currently does not have any operations in the United States.

The purpose of the proposed branch is to allow Bank to better serve the needs of its customers that have business interests in the United States. In addition, the proposed office would seek to develop new customers among U.S. businesses and individuals who have business interests in Taiwan. The activities of the proposed branch office would include commercial lending, mortgage lending, syndicated and participation loans, purchasing and selling interbank funds, maintaining credit balances and deposit accounts, and letter of credit services. Bank would be a qualifying foreign business organization within the meaning of Regulation K (12 C.F.R. 211.23(b)).

In order to approve an application by a foreign bank to establish a branch in the United States, the IBA and Regulation K require the Board to determine that the foreign bank applicant engages directly in the business of banking outside of the United States, and has furnished to the Board the information it needs to assess the application adequately. The Board also shall take into account whether the foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. [sections] 3105(d)(2); 12 C.F.R. 211.24).(2) The Board may also take into account additional standards as set forth in the IBA and Regulation K (12 U.S.C. [sections] 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)).

As noted above, Bank engages directly in the business of banking outside the United States. Bank also has provided the Board with information necessary to assess the application through submissions that address the relevant issues. With respect to supervision by home country authorities, the Board previously has determined, in connection with applications involving other banks in Taiwan, that those banks were subject to home country supervision on a consolidated basis.(3) Bank is supervised by the Ministry of Finance ("Ministry") and the Taiwan central bank on substantially the same terms and conditions as those other banks. Based on all the facts of record, the Board has determined that Bank is subject to comprehensive supervision on a consolidated basis by its home country supervisors.

The Board has also taken into account the additional standards set forth in section 7 of the IBA and Regulation K (see 12 U.S.C. [sections] 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The Ministry has no objection to the establishment of the proposed branch.

Bank must comply with the minimum capital standards of the Basel Capital Accord, as implemented by Taiwan. Bank's capital exceeds these minimum standards and can be considered equivalent to capital that would be required of a U.S. banking organization. Managerial and other financial resources of Bank are also considered consistent with approval, and Bank appears to have the experience and capacity to support the proposed branch. Bank has established controls and procedures for the proposed branch to ensure compliance with U.S. law, as well as controls and procedures for its worldwide operations generally.

With respect to access to information about Bank's operations, the Board has reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates and has communicated with relevant government authorities regarding access to information. Bank has committed to make available to the Board such information on the operations of Bank and any of its affiliates that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 1956, as amended, and other applicable federal law. To the extent that the provision of such information to the Board may be prohibited by law, Bank has committed to cooperate with the Board to obtain any necessary consents or waivers that might be required from third parties for disclosure of such information. In addition, subject to certain conditions, the Ministry may share information on Bank's operations with other supervisors, including the Board. In light of these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has provided adequate assurances of access to any necessary information that the Board may request.

On the basis of all the facts of record, and subject to the commitments made by Bank, as well as the terms and conditions set forth in this order, the Board has determined that Bank's application to establish a branch should be, and hereby is, approved. Should any restrictions on access to information on the operations or activities of Bank and its affiliates subsequently interfere with the Board's ability to obtain information to determine and enforce compliance by Bank or its affiliates with applicable federal statutes, the Board may require termination of any of Bank's direct or indirect activities in the United States. Approval of this application also is specifically conditioned on compliance by Bank with the commitments made in connection with this application and with the conditions in this order.(4) The commitments and conditions referred to above are conditions imposed in writing by the Board in connection with its decision and may be enforced in proceedings under 12 U.S.C. [sections] 1818 against Bank and its affiliates.

By order of the Board of Governors, effective January 24, 2000.

Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.

ROBERT DEV. FRIERSON Associate Secretary of the Board

(1.) All data are as of June 30, 1999.

(2.) In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors:

   (i) Ensure that the bank has adequate procedures for monitoring and
   controlling its activities worldwide;

   (ii) Obtain information on the condition of the bank and its subsidiaries
   and offices through regular examination reports, audit reports, or
   otherwise;

   (iii) Obtain information on the dealings with and relationship between the
   bank and its affiliates, both foreign and domestic;

   (iv) Receive from the bank financial reports that are consolidated on a
   worldwide basis or comparable information that permits analysis of the
   bank's financial condition on a worldwide consolidated basis;

   (v) Evaluate prudential standards, such as capital adequacy and risk asset
   exposure, on a worldwide basis. These are indicia of comprehensive,
   consolidated supervision. No single factor is essential, and other elements
   may inform the Board's determination.

(3.) See Taipei Bank, 79 Federal Reserve Bulletin 143 (1993); United World Chinese Commercial Bank, 79 Federal Reserve Bulletin 146 (1993); Bank of Taiwan, 79 Federal Reserve Bulletin 541 (1993); Chiao Tung Bank, 79 Federal Reserve Bulletin 543 (1993); Medium Business Bank of Taiwan, 79 Federal Reserve Bulletin 807 (1993); The Farmers Bank Of China, 81 Federal Reserve Bulletin 620 (1995); Taiwan Business Bank, 81 Federal Reserve Bulletin 746 (1995); First Commercial Bank, 83 Federal Reserve Bulletin 315 (1997); land Bank of Taiwan, 83 Federal Reserve Bulletin 336 (1997); Bank SinoPac, 83 Federal Reserve Bulletin 669 (1997); Chinatrust Commercial Bank, Ltd., 84 Federal Reserve Bulletin 1121 (1998).

(4.) The Board's authority to approve the establishment of the proposed branch parallels the continuing authority of the State of California to license offices of a foreign bank. The Board's approval of this application does not

supplant the authority of the State of California and the State of California Department of Financial Institutions ("Department") to license the proposed office of Bank in accordance with any terms or conditions that the Department may impose.