FRB Finalizes International Banking Regulations
The FRB adopted extensive revisions to its Regulation K to ease restrictions on the foreign activities of US member banks (i.e., state member and national banks) and bank holding companies ("BHCs"), as well as the US activities of foreign banks. As is discussed below, however, the FRB did not ease its Regulation K restrictions to the extent provided in its 1997 proposal, summarized in the December 23, 1997, Alert (the "1997 Proposal"). The preamble to the final rule provides that, after the passage of the Gramm-Leach-Bliley Act of 1999 ("GLBA"), the most permissive activities under the 1997 Proposal would be available to BHCs that were financial holding companies ("FHCs"), and entitieswishing to engage in those activities should do so by electing FHC status rather than through Regulation K. As a result, as is detailed below, the revised Regulation K’s principal benefit is expediting the process to engage in already permissible
