Loan Loss Allowances
August 5, 1999
Circular No. 11173

To the Chief Executive Officers of All State Member Banks and
Bank Holding Companies in the Second Federal Reserve District:

In November 1998 and March 1999, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision (the "Agencies") issued joint interagency statements on the allowance for loan losses of financial institutions (see our Circulars 11121 and 11143). Available online, is an additional joint statement by the Agencies, dated July 12, 1999, which builds on the prior statements, reaffirms fundamental principles concerning the loan loss allowance, and highlights the future work of the Agencies in this area.

Questions on the allowance for loan losses may be directed, at this Bank, to any member of the portfolio management team responsible for your organization.