The Federal Reserve Board is meeting a 1991 mandate from Congress to beef up its supervision of foreign-owned bank offices in the United States, according to a recent General Accounting office report.
The report, "Implementation of the Foreign Bank Supervision Enhancement Act of 1991," was requested by House Banking's financial institutions subcommittee.
"We found the Fed is basically moving in compliance with the law," said Thomas J. McCool, associate director of financial institutions and market issues for the GAO.
Congress passed the Foreign Bank Supervision Enhancement Act five years ago to give the Fed the authority to review applications or revoke operation privileges of foreign banks. The Fed told the GAO it examined 97% of the 549 foreign bank offices operating in the United States last year. Of those, only 3% were found to have unsafe and unsound practices. - John Shea, Medill News Service