Three European banking companies have obtained Federal Reserve Board approval to buy stakes in Identrus LLC, a multinational joint venture that is developing a digital certificate service for business-to-business commerce on the Internet.
Bayerische Hypo und Vereinsbank and Deutsche Bank of Germany and affiliates of ABN Amro Holding of the Netherlands were each authorized to take as much as a 12.5% voting interest in New York-based Identrus.
Those three organizations were in the original group that announced the formation of Identrus in October 1998. The others were Barclays Bank of London, Bank of America, Chase Manhattan Bank, Citibank, and Bankers Trust Corp., which Deutsche Bank subsequently acquired. Sanwa Bank and Industrial Bank of Japan, Canadian Imperial Bank of Commerce, and Natwest Group of London have also joined the equity-owning group. Each must get appropriate regulatory approvals.
In its order dated Nov. 10, the Federal Reserve cited several precedents supporting digital authentication services by banks and said competition among multiple providers would be beneficial to this emerging market.
The central bank noted that B of A and Citibank have applied to the Office of the Comptroller of the Currency for direct ownership authority and that Chase has obtained New York State Banking Department approval.