To All Depository Institutions, Branches and Agencies of Foreign Banks, Bank Holding Companies, and Others Concerned, in the Second Federal Reserve District:

The following is from a statement by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board has requested comment on proposed comprehensive revisions to its Regulation K governing international banking operations.

The proposals are intended to improve the international competitiveness of U.S. banking organizations by expanding permissible activities abroad and reducing regulatory burden associated with the conduct of such activities.

The Board also requested comment on proposed revisions to Regulation K that are intended to reduce regulatory burden on foreign banks operating in the United States by streamlining the application and notice process.

Comment is requested by March 14, 1998.

The proposed revisions include:

• expansion of authority for U.S. banking organizations to engage in equity securities underwriting and dealing outside the United States;
• relaxation of limits on the ability of U.S. banking organizations to make venture capital investments in non-bank organizations outside the United States;
• a streamlined and expedited review process for U.S. banking organizations to branch abroad, and for foreign banking organizations to establish offices in the United States;
• expedited review of proposals by well-run U.S. banking organizations to make investments abroad;
• increased flexibility in the standard for determining whether a foreign banking organization would qualify for certain nonbanking exemptions from the Bank Holding Company Act;
• implementation of statutory changes with respect to increased investments by U.S. banks in Edge corporation subsidiaries and the interstate operations of foreign banks operating in the United States; and
• other changes to eliminate unnecessary regulatory burden and to streamline and modernize Regulation K.

The Board's proposal as published in the Federal Register of December 31, 1997 is available as a file (pdf - 295kb). Comments may be sent to the Board, as specified in the notice, by March 14, 1998.

Contact:
Public Affairs
(212) 720-6130
general.info@ny.frb.org