N.Y. Exec Forced Out by Fed in BCCI Action

WASHINGTON - The Federal Reserve Board last week announced enforcement actions against a senior executive of a New York bank caught up in the Bank of Credit and Commerce International scandal.

Khusro K. Elley consented to a cease and desist order requiring him to resign as executive vice president of First American Bank of New York.

Mr. Elley also agreed to cooperate fully with the Fed's investigation of BCCI, which was found to have illegally gained control of First American's parent, First American Bankshares of Washington.

Luxembourg-based BCCI was shut in July after regulators in several nations charged that the bank was involved in widespread fraud.

Fed Acts on Yugoslavian Bank

Separately, the Fed imposed a cease-and-desist action on Ljubljanska Banka, the Yugoslavian parent of LBS Bank-New York.

The Fed said LBS Bank's exposure to credits in war-torn Yugoslavia exceeded 50% of its capital, which violated the terms of Ljubljanska Banka's 1986 application to form a U.S. holding company.

The Fed gave the parent 30 days to submit a plan for reducing the exposure to Yugoslavian credits and 180 days to carry out the plan.

Once it has met those conditions, the Fed said, Ljubljanska Banka must enter into a risk-sharing agreement with another financial institution.

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