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GGD-84-39 1 (1984-07-11)

handle is hein.gao/gaobabeqz0001 and id is 1 raw text is: 




BY THE COMPTROLLER GENERAL



Report To The Congress

OF THE UNITED STATES



Statutory Requirements For Examining

International Banking Institutions Need Attention


The Edge Act enables commercial banks to
engage in international banking and financial
operations. Edge Act corporations are required
by law to be examined annually. Federally
licensed branches and agencies of foreign
banks are subject to a similar requirement.

These requirements were established by the
Congress when U.S. banks had little expe-
rience with international financial activities.
Since then, banks have gained considerable
experience, and most Edge Act corporations
and federally licensed branches and agencies
of foreign banks are in good condition.

Because of the rising number of poorly rated
domestic commercial banks, it is increasingly
important to direct relatively scarce bank
examination resources to those financial
institutions in poor condition. Accordingly,
GAO recommends that the requirements for
annual examinations of Edge Act corporations
and for federally licensed branches and
agencies be removed.
In addition, although required by law, the
Federal Reserve does not bill Edge Act corpo-
rations for the costs it incurs in examining
these institutions. GAO therefore recommends
that the Federal Reserve comply with this
requirement.



                                                                JULY  44


                                                                GAO/GGD-84-39
                                    O     oJULY 11. 1984
            NCCOU Ll 0

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