Funding Foreign Bank Examinations
GGD-93-35R: Published: May 4, 1993. Publicly Released: May 4, 1993.
- Full Report:
GAO reviewed the implementation of the Foreign Bank Supervision Enhancement Act of 1991 (FBSEA). GAO noted that: (1) the Federal Reserve is planning to hire additional staff to meet its new responsibilities; (2) although the Federal Reserve has completed many examinations pursuant to its responsibilities under FBSEA, it has not charged foreign banks for any examination costs; and (3) if the Federal Reserve is required to charge foreign banks for examination costs, the charging of such costs may result in a competitive disadvantage to foreign banks.
Recommendation for Executive Action
Status: Closed - Not Implemented
Comments: Section 115 of the Interstate Banking Act of 1994 (P.L. 103-328) provides for a moratorium on charging for examinations of U.S. agencies, branches, and representative offices. This moratorium is for a 3-year period beginning July 25, 1994.
Recommendation: The Federal Reserve should require each Federal Reserve Bank to begin charging foreign banks for the costs of examining their U.S. agencies, branches, and representative offices. If the Federal Reserve continues to believe that the assessment of examination charges under FBSEA creates a conflict with U.S. treaty and trade obligations, it should seek an amendment to FBSEA.
Agency Affected: Federal Reserve System