56949Federal Register / Vol. 64, No. 204 / Friday, October 22, 1999 / Rules and Regulations
1 Pub. L. 95–369, 92 Stat. 607.
2 Pub. L. 102–242, 105 Stat. 2286.
3 Section 2214 of EGRPRA, Pub. L. 104–208, 110
Stat. 3009. Section 3105(c)(1)(C) is codified at 12
U.S.C. 3105(c)(1)(C).
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 10(d) of the FDI Act is codified at 12
U.S.C. 1820(d)(10).
The tourism industry in the
northeastern States is tied heavily to leaf
color changes in the fall, and the maple
tree is noted for producing some of the
most vivid colors. Between mid-
September and late October, for
example, the hardwood forests of New
England draw 1 million tourists and
generate $1 billion in revenue. It is
estimated that up to one-fourth of the
tourism revenue generated annually in
New England is due to the fall foliage
displays.
The commercial fruit industry is also
at risk, as pear, apple, plum, and citrus
trees are susceptible to ALB infestation.
We estimate that, for the United States
as a whole, the cost of replacing host
fruit trees would amount to $5.2 billion
alone for pear, apple, and plum
orchards and $10.4 billion for citrus.
The fruits of host trees would also be
affected by a widespread infestation.
The average 1995–97 value of utilized
production in the United States of the
four fruits noted above is estimated at
$4.7 billion.
The quarantine imposed by this rule
has been determined to be the most
effective means of preventing the
artificial spread of ALB, as biological
controls and pesticides do not presently
appear to be effective alternatives. The
only other alternative we considered
was not to quarantine the newly
infested areas; we rejected this
alternative because it would fail to
prevent the artificial spread of ALB into
noninfested areas of the United States.
List of Subjects in 7 CFR Part 301
Agricultural commodities, Plant
diseases and pests, Quarantine,
Reporting and recordkeeping
requirements, Transportation.
PART 301—DOMESTIC QUARANTINE
NOTICES
Accordingly, we are adopting as a
final rule, without change, the interim
rule that amended 7 CFR part 301 and
that was published at 64 FR 28713–
28715 on May 27, 1999.
Authority: 7 U.S.C. 147a, 150bb, 150dd,
150ee, 150ff, 161, 162, and 164–167; 7 CFR
2.22, 2.80, and 371.2(c).
Done in Washington, DC, this 18th day of
October, 1999.
Bobby R. Acord,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. 99–27659 Filed 10–21–99; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket No. 99–13]
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: Joint final rule.
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 adopting
as a joint final rule their joint interim
rule implementing section 2214 of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA). Section 2214 of EGRPRA
authorizes the Agencies to extend the
examination cycle for certain United
States branches and agencies of foreign
banks. This joint final rule makes
United States branches and agencies of
foreign banks with total assets of $250
million or less eligible for an 18-month
examination cycle if they meet certain
qualifying criteria.
EFFECTIVE DATE: October 22, 1999.
FOR FURTHER INFORMATION CONTACT:
OCC: Martha Clarke, Senior Attorney,
International Activities (202/874–0680);
Jose Tuya, Director, International
Banking & Finance (202/874–4730); or
Karl Betz, Attorney, Legislative and
Regulatory Activities (202/874–5090),
Office of the Comptroller of the
Currency, 250 E Street SW.,
Washington, D.C. 20219.
Board: Barbara J. Bouchard, Manager,
Division of Banking Supervision and
Regulation (202/452–3072); or Jonathan
D. Stoloff, Counsel, Legal Division (202/
452–3269), Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue NW., Washington,
D.C. 20551.
FDIC: Karen Walter, Chief,
International Branch, Division of
Supervision (202/898–3540); or Mark
Mellon, Counsel, Regulation and
Legislation Section, Legal Division (202/
898–3854), Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
Background
The International Banking Act of 1978
(the IBA),1 as amended by the Foreign
Bank Supervision Enhancement Act of
1991,2 prescribed a 12-month
examination schedule for U.S. branches
and agencies of foreign banks. Section
2214 of EGRPRA modified that
requirement by amending section
3105(c)(1)(C) of the IBA to provide that
U.S. branches and agencies of foreign
banks are subject to on-site examination
as frequently as national banks and state
banks are examined by their appropriate
federal banking agencies.3
In general, national banks 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 banks 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. Subsequently, 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
banks and state banks with a composite
rating of 1 under UFIRS and total assets
of less than $250 million, as well as to
certain national banks and state banks
with a composite rating of 2 under
UFIRS and total assets of $100 million
or less. Finally, section 2221 of EGRPRA
amended section 10(d) of the Federal
Deposit Insurance Act (FDI Act) 6 to
provide that at any time after September
23, 1996, U.S. bank supervisory
agencies could extend the 18-month
examination cycle to certain national
banks and state banks with a composite
rating of 2 and total assets of $250
million or less. Effective April 2, 1998,
VerDate 12-OCT-99 09:29 Oct 21, 1999 Jkt 190000 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\A22OC0.020 pfrm01 PsN: 22OCR1
1 Pub. L. 95–369, 92 Stat. 607.
2 Pub. L. 102–242, 105 Stat. 2286.
3 Section 2214 of EGRPRA, Pub. L. 104–208, 110
Stat. 3009. Section 3105(c)(1)(C) is codified at 12
U.S.C. 3105(c)(1)(C).
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 10(d) of the FDI Act is codified at 12
U.S.C. 1820(d)(10).
The tourism industry in the
northeastern States is tied heavily to leaf
color changes in the fall, and the maple
tree is noted for producing some of the
most vivid colors. Between mid-
September and late October, for
example, the hardwood forests of New
England draw 1 million tourists and
generate $1 billion in revenue. It is
estimated that up to one-fourth of the
tourism revenue generated annually in
New England is due to the fall foliage
displays.
The commercial fruit industry is also
at risk, as pear, apple, plum, and citrus
trees are susceptible to ALB infestation.
We estimate that, for the United States
as a whole, the cost of replacing host
fruit trees would amount to $5.2 billion
alone for pear, apple, and plum
orchards and $10.4 billion for citrus.
The fruits of host trees would also be
affected by a widespread infestation.
The average 1995–97 value of utilized
production in the United States of the
four fruits noted above is estimated at
$4.7 billion.
The quarantine imposed by this rule
has been determined to be the most
effective means of preventing the
artificial spread of ALB, as biological
controls and pesticides do not presently
appear to be effective alternatives. The
only other alternative we considered
was not to quarantine the newly
infested areas; we rejected this
alternative because it would fail to
prevent the artificial spread of ALB into
noninfested areas of the United States.
List of Subjects in 7 CFR Part 301
Agricultural commodities, Plant
diseases and pests, Quarantine,
Reporting and recordkeeping
requirements, Transportation.
PART 301—DOMESTIC QUARANTINE
NOTICES
Accordingly, we are adopting as a
final rule, without change, the interim
rule that amended 7 CFR part 301 and
that was published at 64 FR 28713–
28715 on May 27, 1999.
Authority: 7 U.S.C. 147a, 150bb, 150dd,
150ee, 150ff, 161, 162, and 164–167; 7 CFR
2.22, 2.80, and 371.2(c).
Done in Washington, DC, this 18th day of
October, 1999.
Bobby R. Acord,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. 99–27659 Filed 10–21–99; 8:45 am]
BILLING CODE 3410–34–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket No. 99–13]
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: Joint final rule.
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 adopting
as a joint final rule their joint interim
rule implementing section 2214 of the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996
(EGRPRA). Section 2214 of EGRPRA
authorizes the Agencies to extend the
examination cycle for certain United
States branches and agencies of foreign
banks. This joint final rule makes
United States branches and agencies of
foreign banks with total assets of $250
million or less eligible for an 18-month
examination cycle if they meet certain
qualifying criteria.
EFFECTIVE DATE: October 22, 1999.
FOR FURTHER INFORMATION CONTACT:
OCC: Martha Clarke, Senior Attorney,
International Activities (202/874–0680);
Jose Tuya, Director, International
Banking & Finance (202/874–4730); or
Karl Betz, Attorney, Legislative and
Regulatory Activities (202/874–5090),
Office of the Comptroller of the
Currency, 250 E Street SW.,
Washington, D.C. 20219.
Board: Barbara J. Bouchard, Manager,
Division of Banking Supervision and
Regulation (202/452–3072); or Jonathan
D. Stoloff, Counsel, Legal Division (202/
452–3269), Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue NW., Washington,
D.C. 20551.
FDIC: Karen Walter, Chief,
International Branch, Division of
Supervision (202/898–3540); or Mark
Mellon, Counsel, Regulation and
Legislation Section, Legal Division (202/
898–3854), Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
Background
The International Banking Act of 1978
(the IBA),1 as amended by the Foreign
Bank Supervision Enhancement Act of
1991,2 prescribed a 12-month
examination schedule for U.S. branches
and agencies of foreign banks. Section
2214 of EGRPRA modified that
requirement by amending section
3105(c)(1)(C) of the IBA to provide that
U.S. branches and agencies of foreign
banks are subject to on-site examination
as frequently as national banks and state
banks are examined by their appropriate
federal banking agencies.3
In general, national banks 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 banks 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. Subsequently, 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
banks and state banks with a composite
rating of 1 under UFIRS and total assets
of less than $250 million, as well as to
certain national banks and state banks
with a composite rating of 2 under
UFIRS and total assets of $100 million
or less. Finally, section 2221 of EGRPRA
amended section 10(d) of the Federal
Deposit Insurance Act (FDI Act) 6 to
provide that at any time after September
23, 1996, U.S. bank supervisory
agencies could extend the 18-month
examination cycle to certain national
banks and state banks with a composite
rating of 2 and total assets of $250
million or less. Effective April 2, 1998,
VerDate 12-OCT-99 09:29 Oct 21, 1999 Jkt 190000 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\A22OC0.020 pfrm01 PsN: 22OCR1
56950 Federal Register / Vol. 64, No. 204 / Friday, October 22, 1999 / Rules and Regulations
7 The supervisory rating system for 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.
the Agencies issued a final rule that
extended the examination cycle to 18
months for certain national banks and
state banks that satisfy the requirements
of section 2221 of EGRPRA. 63 FR
16377 (April 2, 1998). To be eligible for
the extended cycle, the national bank or
state bank must:
(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 section 10(d)
of the FDI Act.
Interim Rule
To implement section 2214 of
EGRPRA, the Agencies issued a joint
interim rule on August 28, 1998, that
similarly extended the examination
cycle for certain U.S. branches and
agencies of foreign banks. 63 FR 46118.
Under the joint interim rule, a U.S.
branch or agency of a foreign bank may
be considered for an 18-month
examination cycle if the branch or
agency meets certain criteria and if there
are no other factors that cause the
appropriate federal banking agency to
conclude that more frequent
examinations of the branch or agency
are appropriate. To be eligible 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 7
supervisory rating of 1 or 2 at its most
recent examination;
(c) Satisfy the requirements of either
paragraph (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 in an
amount not less than 108 percent of
third party liabilities (determined
consistent with applicable federal and
state law) 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 section 3105(c)(1)(C) of the IBA.
The Agencies noted in the joint
interim rule that each Agency retains
the authority to examine a U.S. branch
or agency of a foreign bank as frequently
as the Agency deems necessary. The
joint interim rule also provided that, in
determining whether a U.S. branch or
agency of a foreign bank is eligible for
an extended examination cycle, the
Agencies may consider additional
factors, including whether:
(a) Any of the individual components
of the ROCA rating of the U.S. branch
or agency is rated 3 or worse;
(b) The results of any off-site
supervision indicate a deterioration in
the condition of the U.S. branch or
agency;
(c) The size, relative importance, and
role of a particular U.S. branch or
agency when reviewed in the context of
the foreign bank’s entire U.S. operations
otherwise necessitate 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 a need to examine the
U.S. branch or agency every 12 months.
The Agencies noted further that they
generally will determine 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
in the joint interim rule.
Since U.S. branches and agencies of
foreign banks do not receive separate
examination ratings of their
management, the Agencies stated in the
joint interim rule that they will use
certain 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 in the
preceding paragraph.
The joint interim rule became
effective immediately, but the Agencies
invited public comment on any aspect
of the joint interim rule. As discussed in
the following paragraphs, the
commenters strongly favored adopting
the expanded examination cycle as set
forth in the joint interim rule.
Comments Received
In response to their request for
comment on the joint interim rule, the
Agencies received a total of seven
comments, including six from banks
and one from a trade association. The
commenters strongly supported the
expanded examination cycle for U.S.
branches and agencies of foreign banks.
They agreed that the expanded
examination cycle would reduce
regulatory burden on smaller, well-run
branches and agencies that do not pose
significant supervisory concerns.
One commenter, while expressing
support for the rule, requested that the
Agencies clarify four points.
First, the commenter sought
clarification that the two tests for
determining whether a branch or agency
is well capitalized are alternative tests
and that use of one test for one
examination cycle does not preclude
use of the other test in subsequent exam
cycles. The commenter is correct. The
criterion based on capital states that the
U.S. branch or agency must satisfy the
requirements of either test. Reliance on
one of the eligibility tests for an
extended examination cycle does not
preclude subsequent reliance on the
other test. The two capital adequacy
tests contained in this rule are limited
in their applicability to determining
whether a branch or agency is eligible
for an extended examination cycle.
These two capital adequacy tests have
no effect on special asset maintenance
requirements.
Second, the commenter also requested
guidance as to how the ‘‘well
capitalized’’ criterion will be
implemented. Capital adequacy will be
determined using regulatory and
supervisory reports, and public
information where appropriate. The
foreign bank’s capital adequacy may be
assessed on the basis of the home
country supervisor’s capital standards if
those standards are in all respects
consistent with the Basel Accord.
Third, the commenter requested that
the Agencies clarify whether both
eligible assets and average third party
liabilities are to be determined
consistent with applicable federal and
state law. The commenter noted that the
wording of the alternative capital test
using eligible assets in the interim rule
suggested that average third party
liabilities were not to be determined in
accordance with applicable federal and
state law. The Agencies have amended
that provision in the final rule to clarify
that both eligible assets and average
third party liabilities are to be
determined consistent with applicable
federal and state law.
VerDate 12-OCT-99 09:29 Oct 21, 1999 Jkt 190000 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\A22OC0.021 pfrm01 PsN: 22OCR1
7 The supervisory rating system for 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.
the Agencies issued a final rule that
extended the examination cycle to 18
months for certain national banks and
state banks that satisfy the requirements
of section 2221 of EGRPRA. 63 FR
16377 (April 2, 1998). To be eligible for
the extended cycle, the national bank or
state bank must:
(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 section 10(d)
of the FDI Act.
Interim Rule
To implement section 2214 of
EGRPRA, the Agencies issued a joint
interim rule on August 28, 1998, that
similarly extended the examination
cycle for certain U.S. branches and
agencies of foreign banks. 63 FR 46118.
Under the joint interim rule, a U.S.
branch or agency of a foreign bank may
be considered for an 18-month
examination cycle if the branch or
agency meets certain criteria and if there
are no other factors that cause the
appropriate federal banking agency to
conclude that more frequent
examinations of the branch or agency
are appropriate. To be eligible 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 7
supervisory rating of 1 or 2 at its most
recent examination;
(c) Satisfy the requirements of either
paragraph (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 in an
amount not less than 108 percent of
third party liabilities (determined
consistent with applicable federal and
state law) 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 section 3105(c)(1)(C) of the IBA.
The Agencies noted in the joint
interim rule that each Agency retains
the authority to examine a U.S. branch
or agency of a foreign bank as frequently
as the Agency deems necessary. The
joint interim rule also provided that, in
determining whether a U.S. branch or
agency of a foreign bank is eligible for
an extended examination cycle, the
Agencies may consider additional
factors, including whether:
(a) Any of the individual components
of the ROCA rating of the U.S. branch
or agency is rated 3 or worse;
(b) The results of any off-site
supervision indicate a deterioration in
the condition of the U.S. branch or
agency;
(c) The size, relative importance, and
role of a particular U.S. branch or
agency when reviewed in the context of
the foreign bank’s entire U.S. operations
otherwise necessitate 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 a need to examine the
U.S. branch or agency every 12 months.
The Agencies noted further that they
generally will determine 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
in the joint interim rule.
Since U.S. branches and agencies of
foreign banks do not receive separate
examination ratings of their
management, the Agencies stated in the
joint interim rule that they will use
certain 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 in the
preceding paragraph.
The joint interim rule became
effective immediately, but the Agencies
invited public comment on any aspect
of the joint interim rule. As discussed in
the following paragraphs, the
commenters strongly favored adopting
the expanded examination cycle as set
forth in the joint interim rule.
Comments Received
In response to their request for
comment on the joint interim rule, the
Agencies received a total of seven
comments, including six from banks
and one from a trade association. The
commenters strongly supported the
expanded examination cycle for U.S.
branches and agencies of foreign banks.
They agreed that the expanded
examination cycle would reduce
regulatory burden on smaller, well-run
branches and agencies that do not pose
significant supervisory concerns.
One commenter, while expressing
support for the rule, requested that the
Agencies clarify four points.
First, the commenter sought
clarification that the two tests for
determining whether a branch or agency
is well capitalized are alternative tests
and that use of one test for one
examination cycle does not preclude
use of the other test in subsequent exam
cycles. The commenter is correct. The
criterion based on capital states that the
U.S. branch or agency must satisfy the
requirements of either test. Reliance on
one of the eligibility tests for an
extended examination cycle does not
preclude subsequent reliance on the
other test. The two capital adequacy
tests contained in this rule are limited
in their applicability to determining
whether a branch or agency is eligible
for an extended examination cycle.
These two capital adequacy tests have
no effect on special asset maintenance
requirements.
Second, the commenter also requested
guidance as to how the ‘‘well
capitalized’’ criterion will be
implemented. Capital adequacy will be
determined using regulatory and
supervisory reports, and public
information where appropriate. The
foreign bank’s capital adequacy may be
assessed on the basis of the home
country supervisor’s capital standards if
those standards are in all respects
consistent with the Basel Accord.
Third, the commenter requested that
the Agencies clarify whether both
eligible assets and average third party
liabilities are to be determined
consistent with applicable federal and
state law. The commenter noted that the
wording of the alternative capital test
using eligible assets in the interim rule
suggested that average third party
liabilities were not to be determined in
accordance with applicable federal and
state law. The Agencies have amended
that provision in the final rule to clarify
that both eligible assets and average
third party liabilities are to be
determined consistent with applicable
federal and state law.
VerDate 12-OCT-99 09:29 Oct 21, 1999 Jkt 190000 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\A22OC0.021 pfrm01 PsN: 22OCR1