(a) Foreign banks
as financial holding companies. A foreign bank that operates
a branch or agency or owns or controls a commercial lending company
in the United States, and any company that owns or controls such a
foreign bank, will be treated as a financial holding company if—
(1) the foreign bank, any
other foreign bank that maintains a U.S. branch, agency, or commercial
lending company and is controlled by the foreign bank or company,
and any U.S. depository institution subsidiary that is owned or controlled
by the foreign bank or company, is and remains well capitalized and
well managed; and
(2) the foreign
bank, and any company that owns or controls the foreign bank, has
made an effective election to be treated as a financial holding company
under this subpart.
4-056.91
(b) Standards for “well capitalized.” A foreign bank will be considered
“well capitalized” if either—
(1) (i) its home country supervisor,
as defined in section 211.21 of the Board’s Regulation K (12 CFR 211.21),
has adopted risk-based capital standards consistent with the Capital
Accord of the Basel Committee on Banking Supervision (Basel Accord);
(ii) the foreign bank maintains
a tier 1 capital to total risk-based assets ratio of 6 percent and
a total capital to total risk-based assets ratio of 10 percent, as
calculated under its home country standard; and
(iii) the foreign bank’s capital is
comparable to the capital required for a U.S. bank owned by a financial
holding company; or
(2) the foreign bank has obtained a determination from the Board
under section 225.91(c) that the foreign bank’s capital is otherwise
comparable to the capital that would be required of a U.S. bank owned
by a financial holding company.
4-056.92
(c) Standards for “well managed.” A foreign bank will be considered
“well managed” if—
(1)
the foreign bank has received at least a satisfactory composite rating
of its U.S. branch, agency, and commercial lending company operations
at its most recent assessment;
(2)
the home country supervisor of the foreign bank consents to the foreign
bank expanding its activities in the United States to include activities
permissible for a financial holding company; and
(3) the management of the foreign bank
meets standards comparable to those required of a U.S. bank owned
by a financial holding company.
