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GGD-93-35R 1 (1993-05-04)

handle is hein.gao/gaobackht0001 and id is 1 raw text is: A() United States (3 O General Accounting Office Washington, D.C. 20548 General Government Division B-253100 May 4, 1993 The Honorable Alan Greenspan Chairman 149124 Board of Governors of the Federal Reserve System Dear Mr. Greenspan: The General Accounting Office is reviewing the implementation of the Foreign Bank Supervision Enhancement Act of 1991 (FBSEA). As you know, this act gives the Federal Reserve significant new authority with respect to U.S. branches, agencies, and representative offices of foreign banks, including enhanced authority to examine these offices. Fulfilling these additional examination responsibilities is having major funding implications for the Federal Reserve. The purpose of this letter is to remind the Federal Reserve about a source of funds that as yet has remained untapped. Although FBSEA requires the Federal Reserve to charge the costs of its annually required examinations of U.S. offices of foreign banks to the foreign bank or foreign company that controls the foreign bank, the Federal Reserve has not yet established any policy to do so. As a result, its own budget is currently bearing the full cost of its growing examination workload. In particular, the cost of these exams at the Federal Reserve Bank of New York, the bank most affected by these additional responsibilities, is estimated to have been about $5 million in 1992 and is expected to grow to over $10 million by 1994, according to officials of the Federal Reserve Bank of New York. Some foreign bank officials have suggested to the Federal Reserve that-FBSEA provisions relating to charging for foreign bank examinations may be interpreted as applying only to periodic specialized examinations and not to annual examinations. However, we believe a better reading of the statute is that the Federal Reserve is required to charge foreign banks for the costs of both types of examinations. GAO/GGD-93-35R Funding Foreign Bank Examinations

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