The usually reticent Federal Reserve Board is admitting a mistake. A key Fed staffer said last week that his division failed to make good on a promise to speed up processing of foreign bank applications.
"I know I promised, but I lied," associate director William A. Ryback told those attending a meeting of the Institute of International Bankers. In June, he pledged to clear up an application backlog "within 30 days."
Processing stalled last November in the wake of a new banking law. Mr. Ryback, who is in charge of implementing the Foreign Bank Supervision Enhancement Act, gave irate bankers little hope that things would speed up soon.
The Fed must still define the activities that representative offices can engage in, he said. Other problems engendered by the new law: time-consuming background checks on shareholders and senior managers, analyses of the applicant banks' home supervisor, and bank secrecy laws that prohibit some applicants from supplying key information to the Fed.
"So," the regulator asked the bankers, "do you still want to trust me again?"