(a) Development
and publication of criteria. Pursuant to the Foreign Bank Supervision
Enchancement Act, Pub. L. 102-242, 105 Stat. 2286 (1991), the Board
shall develop and publish criteria to be used in evaluating the operations
of any foreign bank in the United States that the Board has determined
is not subject to comprehensive consolidated supervision.
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(b) Criteria considered by Board. Following
a determination by the Board that, having taken into account the standards
set forth in section 211.24(c)(1), a foreign bank is not subject to
CCS, the Board shall consider the following criteria in determining
whether the foreign bank’s U.S. operations should be permitted to
continue and, if so, whether any supervisory constraints should be
placed upon the bank in connection with those operations:
(1) the proportion of the foreign bank’s
total assets and total liabilities that are located or booked in its
home country, as well as the distribution and location of its assets
and liabilities that are located or booked elsewhere;
(2) the extent to which the operations
and assets of the foreign bank and any affiliates are subject to supervision
by its home-country supervisor;
(3) whether the home-country supervisor of such foreign bank is actively
working to establish arrangements for the comprehensive consolidated
supervision of the bank, and whether demonstrable progress is being
made;
(4) whether the foreign bank
has effective and reliable systems of internal controls and management
information and reporting, which enable its management properly to
oversee its worldwide operations;
(5) whether the foreign bank’s home-country supervisor has any objection
to the bank continuing to operate in the United States;
(6) whether the foreign bank’s home-country
supervisor and the home-country supervisor of any parent of the foreign
bank share material information regarding the operations of the foreign
bank with other supervisory authorities;
(7) the relationship of the U.S. operations
to the other operations of the foreign bank, including whether the
foreign bank maintains funds in its U.S. offices that are in excess
of amounts due to its U.S. offices from the foreign bank’s non-U.S.
offices;
(8) the soundness of the
foreign bank’s overall financial condition;
(9) the managerial resources of the foreign bank, including the competence,
experience, and integrity of the officers and directors, and the integrity
of its principal shareholders;
(10)
the scope and frequency of external audits of the foreign bank;
(11) the operating record of the foreign
bank generally and its role in the banking system in its home country;
(12) the foreign bank’s record of
compliance with relevant laws, as well as the adequacy of its anti-money
laundering controls and procedures, in respect of its worldwide operations;
(13) the operating record of the U.S.
offices of the foreign bank;
(14)
the views and recommendations of the Comptroller or the relevant state
supervisors in those states in which the foreign bank has operations,
as appropriate;
(15) whether the
foreign bank, if requested, has provided the Board with adequate assurances
that such information will be made available on the operations or
activities of the foreign bank and any of its affiliates as the Board
deems necessary to determine and enforce compliance with the IBA,
the BHC Act, and other U.S. banking statutes; and
(16) any other information relevant to
the safety and soundness of the U.S. operations of the foreign bank.
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(c) Restrictions on U.S. operations.
(1) Terms of agreement. Any foreign bank that
the Board determines is not subject to CCS may be required to enter
into an agreement to conduct its U.S. operations subject to such restrictions
as the Board, having considered the criteria set forth in paragraph
(b) of this section, determines to be appropriate in order to ensure
the safety and soundness of its U.S. operations.
(2) Failure to
enter into or comply with agreement. A foreign bank that is required
by the Board to enter into an agreement pursuant to paragraph (c)(1)
of this section and either fails to do so, or fails to comply with
the terms of such agreement, may be subject to—
(i) enforcement action in order to ensure
safe and sound banking operations, under 12 U.S.C. 1818; or
(ii) termination or a recommendation
for termination of its U.S. operations under section 211.25(a) and
(e) and section (7)(e) of the IBA (12 U.S.C. 3105(e)).
