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Final rule on regulation K regarding international banking. (Announcements).

The Federal Reserve Board approved on October 17, 2001, comprehensive revisions to Regulation K (International Banking Operations) expanding permissible activities abroad for U.S. banking organizations and reducing associated regulatory burdens.

The final rule also reduces regulatory burden on foreign banks operating in the United States by streamlining the application and notice processes.

The final rule reflects public comments received, enactment of the Gramm-Leach-Bliley Act, and changes to the bank regulatory environment since the Board issued proposed revisions to Regulation K in December 1997.

The final rule does the following:

* Streamlines foreign branching procedures for U.S. banking organizations

* Authorizes expanded activities in foreign branches of U.S. banks

* Implements recent statutory changes authorizing a bank to invest up to 20 percent of capital and surplus in Edge corporations

* Expands permissible foreign activities of U.S. banking organizations, including securities activities, and investments by U.S. banking organizations under the general consent procedures

* Streamlines the application procedures applicable to foreign banks seeking to expand operations in the United States

* Liberalizes provisions regarding the qualification of foreign banking organizations for exemptions from the nonbanking prohibitions of section 4 of the Bank Holding Company Act

* Implements provisions of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 that affect foreign banks

* Includes other changes to eliminate unnecessary regulatory burden and to streamline and modernize Regulation K.

The final rule will become effective on or about November 20, 2001, within thirty days of publication in the Federal Register.
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Publication:Federal Reserve Bulletin
Article Type:Brief Article
Geographic Code:1USA
Date:Dec 1, 2001
Words:246
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