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86 Fed. Res. Bull. 821 (2000)
Announcements

handle is hein.journals/fedred86 and id is 1783 raw text is: Announcements MODIFICATION OF SUPERVISION PROGRAM FOR US. OPERATIONS OF FOREIGN BANKS The Federal Reserve Board announced on Octo- ber 24, 2000, that it is updating and streamlining the interagency program for supervising the U.S. opera- tions of foreign banks in cooperation with other fed- eral and state authorities involved in supervising the banks. The changes, outlined in a supervisory letter (SR 00-14) to Federal Reserve supervisors, include sharing supervisors' Strength of Support Assessment (SOSA) rankings with the senior managers of foreign banks and the banks' home country supervisors. Also, the five current SOSA rankings, A to E, were stream- lined into three rankings, 1 to 3. SOSA rankings, which have been used since 1995, assess a foreign bank's ability to provide financial, liquidity, and management support to its U.S. opera- tions. They serve as a starting point for U.S. bank supervisors in assessing the risks of foreign banks' operations in the United States and in formulating a strategy for their supervision. Sharing SOSA rankings should strengthen com- munications with bank management, as well as enhance information sharing, collaboration, and coor- dination between the host (U.S.) and home country authorities in the supervision of multinational bank- ing organizations, wrote Richard Spillenkothen, director of the Board's Division of Banking Super- vision and Regulation. U.S. supervisors will continue to provide the senior management of foreign banks and their home coun- try supervisors with examination ratings of the for- eign banking organizations' operations in the United States. Supervisory letters are the Federal Reserve's pri- mary means of communicating key policy direc- tives to its supervisory staff and the banking industry. They can be viewed on the Board's web site: www.federalreserve.gov/boarddocs/srletters. NEGOTIATION OF ACH TRANSACTION FEES WITH PRIVATE-SECTOR OPERATORS The Federal Reserve Board announced on Octo- ber 31, 2000, a new approach to pricing Federal Reserve Banks' automated clearinghouse (ACH) transactions, which is intended to enhance compe- tition in the provision of services to depository institutions. The ACH is a nationwide system used to process electronically originated credit and debit transfers. ACH credit transfers include direct deposit payroll payments and corporate payments to contractors and vendors. ACH debit transfers include consumer pay- ments on insurance premiums, mortgage loans, and other bills. The Reserve Banks and private-sector ACH opera- tors (PSOs) rely on each other to process some trans- actions in which either the originating depository financial institution or receiving depository financial institution is not their customer. Some industry repre- sentatives expressed concern that Reserve Banks' deposit deadlines and price structure do not permit the PSOs to compete effectively. Under the new approach approved by the Board, the Reserve Banks will negotiate with the PSOs regarding new deposit deadlines and fees for inter- operator transactions between Reserve Banks and the PSOs. Eligibility for the new deposit deadlines and fees will be limited to operators as defined by the rules of the National Automated Clearing House Association. The new interoperator deadlines will be implemented no later than June 2001 and the new fees no later than September 2001. INCREASE IN ADVERSELY CLASSIFIED SYNDICATED LOANS Syndicated bank loans adversely classified by exam- iners increased in 2000 for the second consecutive year, according to data released on October 10, 2000, by three federal bank regulatory agencies. The agencies-the Board of Governors of the Fed- eral Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation-released aggregate data for the past six years and data by major industry sector for the past three years. Under the Shared National Credit (SNC) Program, the agencies review large syndicated loans annually, usually in May and June. The program, established in 1977, is designed to provide an efficient and consis-

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