Supervisory Examinations of International Banking Facilities Need To Be Improved

GGD-84-65: Published: Sep 20, 1984. Publicly Released: Sep 20, 1984.

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GAO reviewed examinations of international banking facilities (IBF) conducted by federal bank regulatory agencies to determine if the examinations are adequate to ensure compliance with restrictions imposed on IBF activities. The group of regulatory agencies is comprised of the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve.

GAO found that the regulatory agencies have not ensured that all IBF are complying with regulatory restrictions, because recognized minimum examination standards have not been developed and utilized. The Federal Reserve's examinations were the most comprehensive, but documentation of examinations was sometimes incomplete, and scope and methodology standards for reviews have not been disseminated.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: OCC established uniform guidance for its own examiners, but it did not believe that entirely new procedures were necessary. Guidance was reviewed.

    Recommendation: The Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and FDIC should develop and use examination procedures to ensure compliance with IBF restrictions. They should work together to adopt more complete and uniform guidance to ensure compliance with the restrictions on IBF activities. These guidelines should include procedures, such as: (1) minimum scope required; (2) methodologies to be used; and (3) documentation needed.

    Agency Affected: Department of the Treasury: Office of the Comptroller of the Currency

  2. Status: Closed - Implemented

    Comments: FDIC adopted uniform examination guidelines.

    Recommendation: The Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and FDIC should develop and use examination procedures to ensure compliance with IBF restrictions. They should work together to adopt more complete and uniform guidance to ensure compliance with the restrictions on IBF activities. These guidelines should include procedures, such as: (1) minimum scope required; (2) methodologies to be used; and (3) documentation needed.

    Agency Affected: Federal Deposit Insurance Corporation

  3. Status: Closed - Implemented

    Comments: The Board of Governors indicated that an examination procedure training course was developed. Course content was reviewed and it responds to this recommendation for uniform guidance.

    Recommendation: The Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and FDIC should develop and use examination procedures to ensure compliance with IBF restrictions. They should work together to adopt more complete and uniform guidance to ensure compliance with the restrictions on IBF activities. These guidelines should include procedures, such as: (1) minimum scope required; (2) methodologies to be used; and (3) documentation needed.

    Agency Affected: Federal Reserve System: Board of Governors

 

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