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For release on delivery
9:30 a.m. E.D.T.
June 17/ 1986
Statement by
Manuel H. Johnson/ Jr.
Member, Board of Governors of the Federal Reserve System
before the
Subcommittee on International Finance and Monetary Policy
of the
Committee on Banking, Housing, and Urban Affairs
United States Senate
June 17, 1986
Thank you for the opportunity to present the views of
the Federal Reserve Board on S. 1934,
Export Trading Company Act of 1982.
the bill to amend the
We at the Board support
efforts to lower this country's trade deficit, and wish to work
with Congress
problem.
in attempting
It is not
to arrive
the view of
at
solutions
the Board,
however,
amending the Bank Export Services Act ("BESA")
this time.
has
that
is necessary at
Given the unfavorable economic conditions that have
existed since enactment of
statute
to the
not
been
the BESA,
given
a
fair
we
feel
test,
the
and
effectiveness should be evaluated in the future.
existing
that
its
As to the
specific provisions of S.1934, the Board opposes three of the
revisions to the BESA proposed in the bill on grounds of safety
and soundness, but has fewer reservations concerning two other
proposed revisions.
In my testimony,
I will review briefly the Board's
implementation to date of the BESA
(Title
II of the Export
Trading Company Act of 1982), discuss some of the experiences
of bank-affiliated export trading companies
("ETCs") and other
trading companies, and analyze and give in greater detail the
Board's views on the provisions of S. 1934.
2
-
The
BESA
and
the
Board's
-
Regulations
The Export Trading Company Act of 1982 ("ETC Act") was
designed to help promote exports by facilitating the formation
and operation of ETCs.
The BESA provides a limited exception
to the nonbanking prohibitions of the Bank Holding Company Act
by permitting bank holding companies and certain other types of
banking organizations to make equity investments in ETCs.
purposes
of
the
establishment
BESA
of U. S.
foreign-owned ETCs;
agriculture,
were:
(1) to
ETCs that
provide
could be
for
The
the
competitive
with
(2) to provide U. S. commerce, industry and
especially small and medium-sized firms with
means of exporting their goods and services;
a
(3) to foster the
participation by regional and smaller banks in the development
of ETCs; and (4) to facilitate the formation of joint venture
ETCs between bank holding companies and nonbank firms.
Thus,
traditional
the BESA represents a dramatic departure
banking
legislation
in
that
it
from
permits
participation by banking organizations in commercial ventures.
In recognition of this expanded latitude,
however,
Congress
included a number of prudential safeguards to limit potential
adverse financial effects on banks affiliated with ETCs.
statute provides that a bank holding company may not
The
invest
more than 5 percent of its consolidated capital and surplus in
an
ETC nor
lend more
than
10 percent
capital and surplus to an ETC.
of
its
consolidated
It also provides that a bank
holding company may invest in an ETC only after allowing for
-
review by the Federal Reserve.
3
-
The Federal Reserve is required
to review the notice in order to determine whether the proposal
may
result
in
unsafe
or
unsound
banking
practices,
undue
concentration of resources, decreased or unfair competition, or
conflicts of interest, or whether the investment would have a
materially adverse effect
on the safety and soundness of a
subsidiary bank of the bank holding company.
The Board
issued final
BSSA in June, 1983.
regulations
implementing the
These regulations were later modified to
simplify the notification process and provide
authority to the individual
certain ETC notifications.
for delegated
Federal Reserve Banks to review
Virtually all of the notifications
of intent to establish ETCs have been acted upon within the
60-day
time
notification
disapproved.
period
by
a
set
bank
forth
to
in
invest
the
in
statute,
an
ETC
and
has
no
been
Fifteen of the 24 ETC notifications filed after
the adoption of the delegation procedures were processed by the
Reserve Banks with no Board review.
Response to the Act
Ac you are well aware, the economic climate since the
ETC Act was passed has not been favorable to exports.
The Act
was signed during the fourth quarter of 1982 when the U.S.
economy was in the depths of a recession and the volume of
exports had fallen more than 20 percent from its peak in 1980.
Since
that
time,
U.S.
output
and
employment
have
expanded
4
-
rapidly.
By
contrast,
U.S.
-
exports
have
rebounded
moderately and still remain below their 1980 peak.
trade
deficit
increased
from
$25
billion
in
only
The U.S.
1980
to
approximately $125 billion in 1985.
The weakness of U.S. exports can be attributed to a
number of macroeconomic developments that took place
early
to mid-1980's
recently.
and
that
have
continued
until
in the
fairly
These factors include the rise of the dollar against
foreign currencies; the relatively sluggish growth of foreign
economies; and the drop in imports by countries experiencing
problems meeting their external debt obligations.
Moreover, as was discussed during early hearings on
the
BESA,
U.S.
manufacturers
have
not
traditionally
made
widespread use of trading companies as a medium for exporting
their goods.
By one estimate, in 1982, there were about 2,000
American-owned trading companies active in the United States.
However,
percent
these
of
companies
all
U.S.
were
exports.
involved
in
only
Larger
U.S.
about
ten
multi-national
companies with substantial sales abroad had their own in-house
marketing
capability
subsidiaries.
trading
Thus,
company
or
a
few
had
at the
time
the
trading
Act
was
generally was not a prominent
company
passed,
vehicle
the
for
selling U.S. exports, and it was unlikely that the patterns of
U.S. businesses with exporting capabilities could be changed in
only a few years.
-
Notwithstanding
this
5
-
business
environment,
40 bank
holding companies have notified the Federal Reserve System of
their
intent
Appendix
to
to
this
invest
in
ETCs.
testimony
show
(Tables
the
attached
status
notification acted upon by the System).
of
as
each
an
ETC
Several of these ETCs
appear to be operating profitably and expanding their overseas
operations.
In
contrast,
the
performance
of
many
bank-affiliated ETCs has been disappointing.
are
no
longer
conditions
operational.
in their
In addition
first years
of
In fact, eleven
to poor
of existence
these
economic
resulting
in
diminished profit potential, these ETCs have also encountered
start-up
difficulties
trading business.
resulting
from unfamiliarity with
Other problems encountered are peculiar to
the activities of trading companies,
they have been operating.
substantial
the
regardless of how long
For example,
one ETC experienced
difficulties because a major
customer
broke
the
terms of its trade agreement; another lost its capital because
of its inability to deliver on a major contract; and a third
was closed after suffering significant
losses
resulting from
the lack of adequate controls over its trading activities.
least
four
operations
bank
holding
of their
ETCs
companies
either
have
discontinued
temporarily
or
the
permanently
because the operating losses were found to be unacceptable.
At
-
There is no evidence,
6
-
however,
that
ETCs affiliated
with banks have been any less successful than trading companies
that have no connection with banking
organizations.
While
there is no means of tracking all these trading companies,
the
General Accounting Office has conducted a survey of 23 trading
organizations that have obtained certificates of review from
the Department of Commerce.
business
has
been
Many of these firms reported that
disappointing,
citing
economic
factors,
particularly the high value of the dollar as the reason.
It is
also interesting to note that the membership of the National
Association
of
Export
Companies,
an
organization
composed
primarily of nonbank export trading companies, dropped by half
in the last four years,
again.
fact
and is only beginning
to
increase
This drop in membership is reportedly a result of the
that many
of
the member
companies
have
gone
out
of
business.
S. 1934
There is an understandable concern about the mediocre
performance of ETCs since the passage of the Act resulting in
attempts to deal with the situation by amending sections of the
BESA.
The amendments
regulations.
economic
Broad
would modify
trends,
conditions —
not
certain
however,
the
such
Board's
impeded the results of the legislation.
of
the
Board's
as
unfavorable
regulations —
have
Moreover, three of the
bill's provisions present serious issues related to the safety
-
7
-
and soundness of banking organizations investing in ETCs.
From
a supervisory standpoint, we are less concerned about the other
two provisions.
However,
I would
note
dealing with the calculation of export
policy questions
about
Congressional
that
the
revenues
intent
provision
does
raise
in establishing
ETCs to foster U.S. exports.
1.
Transactions with Affiliates
The BESA provides
that extensions of credit from a
bank to its affiliated ETC are covered by section 23A of the
Federal
Reserve
Act.
Section 23A is a cornerstone
of
the
regulatory structure for protecting banks from credit judgments
made for noncommercial reasons.
It generally limits the amount
of credit that banks may extend
to a nonbank affiliate and
subjects
such
credit
extensions
to
certain
collateral
requirements.
S.
1934 would exempt from section 23A of the Federal
Reserve Act a bank's transactions with its affiliated ETC.
purpose
of
this
exemption,
according
to
the
The
statement
introducing the bill, is to remove a competitive "disadvantage"
from ETCs, permitting them to borrow from their affiliated bank
without meeting the collateral requirements of section 23A.
Experience
over
the
years
has
demonstrated
that
limitations on self-dealing between a bank and its affiliates
are essential to help curb abuses, to maintain bank safety and
8
-
-
soundness and to prevent excessive risk to the federal safety
net.
Congress
also
has
recognized
protections found in 23A —
the
importance
of
the
every deregulatory proposal in the
last four years has used section 23A as the central mechanism
for
preserving
the
safety
and
soundness
of
banking
organizations with expanded powers to enter nonbanking areas.
The experience to date reinforces the desirability of
maintaining the protections afforded by section 23A.
In one
case, a bank lent to its affiliated ETC amounts in violation of
section 23A without required collateral.
The ETC was unable to
repay the advances and thus the condition of the bank was
affected.
not
have
Had section 23A been complied with, the bank would
exposed
itself
to
these
losses.
Therefore,
an
exemption from section 23A for transactions with an ETC does
not appear to be in the best interests of preserving safety and
soundness as it creates the opportunity for a bank's resources
to
be
misused
activities.
in
support
of
the
affiliate's
trading
In the area of extensions of credit,
it is most
important to strike the proper balance between encouraging the
growth
of
Moreover,
ETCs
and preventing
imprudent
banking
the application of section 23A does
practices.
not
impose
competitive disadvantage on ETCs affiliated with banks.
like
other
trading
companies,
are
free
to
borrow
They,
from
unaffiliated lenders on terms determined by the market.
a
-
9
-
The Board as a matter of policy has generally not
granted exemptions
however,
from section 23A.
With
respect
to ETCs,
the Board has included in its regulations a waiver
from the strict collateralization standards of section 23A for
those
transactions
in which
the
ETC takes
title
to goods
against a firm order and the lending bank maintains a security
interest
these
in those goods.
circumstances
The Board has determined
a waiver
would
permit
ETCs
that
in
to obtain
financing for transactions in goods without creating undue risk
to the affiliated bank.
In addition, the Board has stated that
it would consider granting PTCs additional waivers from these
collateral requirements baccd on specific requests.
The bill also would relieve extensions of credit by a
bank
to its affiliateu
section 23A.
more
than
affiliate.
ETC from the quantitative limits of
These limitations provide that a bank may lend no
ten
percent
of
its
capital
and
surplus
to
an
The BESA itself limits extensions of credit by a
bank holding company or its subsidiaries to an affiliated ETC
to ten percent of the holding company's capital and surplus.
Thus, the bill's proposed exemption could have the effect of
significantly
affiliates.
increasing
The
Board
the
exposure
strongly
of
a
recommends
bank
that
to
its
the
quantitative limits on these extensions of credit be retained.
2.
Capital Adequacy
In
reviewing
notices
by
banking
organizations
to
invest in ETCs, the Board considers the assets to equity ratio
-
of each proposed
account,
among
10
-
ETC on a case-by-case
other
factors,
proposed activities.
the
basis,
riskiness
S. 1934 would prohibit
taking
of
the
into
ETC's
the Board
from
disapproving a bank's investment in an ETC solely on the basis
of the proposed asset to equity ratio unless that ratio were
greater than 25 to 1.
The Board, by reason of its responsibilities as a bank
regulator,
has
maintenance
historically
of adequate
recognized
capital
the
need
in individual
for
state
the
member
banks and bank holding companies and in the banking system in
general.
Capital provides a buffer for banking organizations
in
of
times
confidence
poor
performance,
in particular
helps
banking
to
maintain
organizations
public
and
in
the
banking system, and supports the reasonable growth of banking
organizations.
An evaluation of capital adequacy is one of the
major purposes of a bank or bank holding company examination.
Congress
has
organizations
to
International
Lending
required
the
maintain
bank
to
establishing
minimum
Supervision
achieve
For
the
and
levels
this
necessity
adequate
regulatory
institutions
institutions."
recognized
capital.
for
In
Act
of
1983,
agencies
to
"cause
maintain
of
adequate
capital
purpose,
for
capital
banking
the
Congress
banking
capital
such
by
banking
requirements
are
assessed on a consolidated basis, although the capital adequacy
of subsidiary organizations
is also taken into account.
The
-
latter
is
necessary
because
11
the
-
condition
of
affiliated
organizations can have an important effect on their
related
banks.
In the case of ETCs
the Board strongly
recommends
against the proposed legislative standard for the leveraging of
ETCs.
In carrying out its duty to preserve the safe and sound
operation of bank holding companies/ the Board must be able to
examine carefully the capital structure and proposed leveraging
ratios of bank-affiliated ETCs.
Capital adequacy is a critical
determinant of the financial strength of the ETC and of its
ability to withstand unexpected adverse developments so as not
to affect the financial resources of the parent holding company
or the safety and soundness of affiliated banks.
There is no
justification for a statutory rule allowing a minimum capital
level
for bank-affiliated
ETCs substantially less
than
that
required for banks, when the ETCs' activities are likely co be
outside the normal range of banking operations and therefore
present greater/ not fewer, risks.
Thus, we do not adhere to
the presumption of S. 1934 that a leveraging ratio of
25:1
would be consistent with the sound financial operation of an
ETC.
Many factors must be taken
into account,
such as the
nature of the ETC's business, the size of its inventory,
and
the size of the bank holding company's investment in the ETC.
Only a case-by-case analysis permits all these factors to be
taken adequately into account.
-
12
-
In this regard, the Board recently acted on a request
from a bank holding company to adopt a leveraging ratio for its
ETC that was higher than the 10:1 ratio it had proposed in an
earlier
notification
to
a
Federal
Reserve
Bank.
After
determining that the nature and riskiness of the activities
proposed for the ETC were similar to those of secured lending
transactions,
the Board approved a leveraging ratio of 17:1.
This action is illustrative of the flexible approach followed
by the Board with respect to the capitalization of ETCs.
In light of the critical
importance of the capital
adequacy of each subsidiary company in a bank holding company
organization, the Board needs to retain its discretion in this
area.
3.
Exporting Services
The BESA, read together with the Board's regulations,
defines an ETC in which a banking organization is permitted to
invest
as
a
company
that
is
exclusively
engaged
in
international trade, and that principally exports, or provides
services
to
facilitate
produced by others.
ETC to include
the
export
of,
goods
and
services
S. 1934 would modify the definition of an
companies
that principally
export
goods
or
services produced by themselves or any of their affiliates.
This revision would permit a bank to invest in any company that
provides its own services to foreign customers regardless of
whether the services relate to trade.
-
The
common
thread
13
-
throughout
consideration
of
the
original legislation was that the experience and expertise of
banks in financing foreign investment was thought to be needed
by
export
trading
intermediaries
for
companies —
producers
companies
and
that
serve
as
of
goods
and
suppliers
services in the foreign marketing and sale of their products by
providing
a
range
of
export
trade
services.
It was
not
intended that banking organizations would serve as a source of
capital investment in various service industries generally and
assume the risks associated with those industries.
The Board's regulations do not limit the ability of
bank-affiliated ETCs to offer a broad range of trade-related
services both in the United States and abroad.
For example,
the BESA and the regulations permit ETCs to provide consulting,
market
design,
research,
legal
marketing,
assistance,
insurance
product
transportation
research
including
and
freight
forwarding, warehousing, foreign exchange, financing and taking
title to goods, when provided in order to facilitate the trade
in goods and services produced by others.
notifications
to the Federal
Reserve,
providing many of the trade services
According
to the
a number of ETCs are
included
in this list.
Moreover, the Board has recognized that this list of services
is not exhaustive.
For example,
activities were related
upon demonstrating that the
to international
trade,
one ETC has
acquired a company in England that engages in customs
bonding
-
14
-
services and in certain types of inventory control services
related to cross-border
responded
favorably
to
trade.
In addition,
several
export
the Board has
trading
company
notifications that specifically contemplated the establishment
of overseas offices and divisions.
The practical effect of S. 1934 would be to change the
Congressionally intended emphasis in the BESA from promoting
U.S. exports and employment to providing a vehicle by which
commercial banking organizations, through the medium of an ETC,
could acquire organizations serving overseas customers without
any benefit to the United States trade or balance of payments
position.
The proposal would thus have the effect of changing
the incentive in the ETC Act to promote U.S. exports, while
potentially undermining the public policy objectives embodied
in the separation of banking and
public
policy
issues
commerce.
should be addressed
Such
directly
important
and
not
indirectly through technical changes in the BESA.
While the last two provisions of S. 1934, which I will
now discuss, appear to raise few supervisory concerns on our
part, the calculation of the export revenues provision, as I
have mentioned, does raise questions of policy.
1.
Calculation of Export Revenues
The BESA defines an ETC as a company
"organized and
operated principally for purposes of exporting [or facilitating
the export
of]
goods
States . . .
This
improving U.S.
and
services
definition
produced
reflects
export performance.
in
the
United
Congress'
goal
In accordance with
of
this
purpose, the Board's current regulations require that more than
half of an export trading company's revenues over a two-year
period be derived from U.S. exports.
Under S. 1934 a company would qualify as an export
trading
company
if
its
revenues from imports.
or associated with
calculations.
revenues
from
exports
exceed
its
Revenues derived from third party trade
countertrade would
be
excluded
from the
This would mean that an "export trading company"
could bti a company substantially engaged in third party trade
or countertrade involving two foreign countries, with minimal
involvement
States.
the
in exporting goods or services
from the United
In fact, the proposal could hurt U.S. exports, since
goods
being
traded
outside
the
United
States
can
substituted for goods exported from the United States.
result
would
amount
to
a
substantial
alteration
be
Such a
of
Congressional intent as to the purposes of ETCs to promote the
export of U.S. goods and services and would be contrary to the
original premise for allowing bank holding companies to engage
in this activity:
that the increased risks undertaken by a
bank holding company through an ETC would be counter-balanced
by an increase in U.S. exports.
Ultimately, however, it is up
to Congress to determine whether ETCs should continue to have
as their primary purpose the export of U.S. goods and services.
-
2.
Inventory
The
Board's
regulations
16
-
provide
that
a notice
to
invest in an ETC may be delegated to the appropriate Federal
Reserve
Bank,
rather
than
reviewed
by
the
Board,
if
the
proposed export trading company will take title to goods only
against firm orders,
$2 million.
that
the
or if its inventory is worth less than
Taking title to goods
Board
felt
involves
it should have
the
sufficient
opportunity
risk
on
a
case-by-case basis to review carefully proposals involving this
activity.
those
The Board wanted to reserve the right to disapprove
proposals
that
could
involve
unsafe
and
unsound
practices, as, for example, where a bank-affiliated ETC has an
inadequate system of management controls, or where the ETC has
insufficient safeguards to protect against a violation of the
statutory prohibition against speculation in commodities.
Board has in fact
reviewed and did not
object
The
to several
notices where projected inventory is substantially greater than
$2 million.
S. 1934 prohibits
the Board from imposing a dollar
limit on an ETC's inventory unless the Board finds that the
limit is necessary to prevent material adverse effects on a
bank affiliate of the ETC.
This provision would merely codify
the Board's current practice and would provide the Board with
sufficient authority to exercise its supervisory powers in this
area when necessary.
-
17
-
Conclusion
In conclusion,
I would like to emphasize again the
Board's support for a strengthened and expanding export sector
of the U.S. economy.
In this context, we would urge Congress
to allow for a fair testing of the existing law and to refrain
at this time from adopting the proposed amendments.
NOTIFICATIONS TO ESTABLISH EXPORT TRADING COMPANIES
Bank Holding Ocmpany
Export Trading Company
Date of
Systan Action
Current Status
Security Pacific Corporation,
San Francisco, CA
Security Pacific Export
Trading Company
Los Angeles, CA
5/09/83
Operating
Citicorp,
New York, NY
Citicorp Internationa]
Trading Company,
New York, NY
5/31/83
Operating
Walter E. Heller International
Corporation,
Chicago, IL
Heller Trading Company
Chicago, IL
6/13/83
Closed
First Interstate Bancorp,
Los Angeles, CA
First Interstate Trading
Company,
Los Angeles, CA
6/15/83
Operating
First Kentucky National
Corporation,
Louisville, KY
First Kentucky National
Trading Company,
Louisville, KY
7/25/83
Inactive
Union Bancorp, Inc.,
Los Angeles, CA
StanChart Export Services
Company, Inc.,
Los Angeles, CA
7/25/33
Operating
Crocker National Corporation,
San Francisco, CA
Crocker Pacific Trade
Corporation,
San Francisco, CA
8/30/83
Closed
9/14/83
Operating
Bancorps1 International
Ramapo Financial Corp.,
Trading Corporation,
Wayne, NJ;
Scmerset, NJ
Ultra Bancorporation,
Bridgewater, NJ; and
New Jersey National Corporation,
Trenton, NJ
9/19/83
State Street Boston Corporation, State Street Trade
Development Corporation, Inc.,
Boston, MA
Boston, MA
International Bancshares
Corporation,
Laredo, TX
IBC Trading Company,
Laredo, TX
United Midwest Bancshares,
Inc.,
Cincinnati, OH
United Midwest International
Corporation,
Cincinnati, OH
10/03/83
Sold
Not Activated
Closed
2
Bank Holding Caqpany
Export Trading Ccnpany
Date of
System Action
Current Status
U.S. Bancorp,
Portland, OR
U.S. World Trade Corporation,
Portland, OR
11/17/83
Inactive
First Chicago Corporation,
Chicago, IL
First Chicago Trading
Company,
Chicago, IL
11/21/83
Operating
Rainier Baneorporation,
Seattle, WA
Rainier International
Trading Company,
Seattle, WA
12/07/83
Operating
Shawmut Corp.,
Boston, MA.
Shawmut Export Corporation,
Boston, MA
12/12/83
Operating
Hongkong and Shanghai
Banking Corporation,
Hong Kong
Equator Trading Company
Limited,
Hartford, CT
12/27/83
Operating
BankAmerica Corporation,
San Francisco, CA
BankAmerica World Trade
Corporation,
San Francisco, CA
02/02/84
Inactive
Bankers Trust New York
Corporation,
New York, NY
Bankers Trust International
Trading Corporation
New York, NY
02/02/84
Operating
First National State
Baneorporation,
Newark, NJ
First International Trading
Co.,
Newark, NJ
02/13/84*
Operating
Chase Manhattan Corp.,
New York, NY
Chase Trade, Inc.,
New York, NY
02/21/84*
Operating
Society Corporation,
Cleveland, OH
Export Partnership for
International Trade, Inc.,
Cleveland, OH
03/04/84
Operating
Fleet Financial Group, Inc.
Providence, RI
Fleeting Trading Company,
Providence, RI
03/19/84*
Inactive
First National Bancshares, Inc.
Houma, LA
First Export Corporation,
Houma, LA
04/06/84*
Operating
Manufacturers Hanover
Corporation,
New York, NY
C.I.T. International
Sales Corporation,
New York, NY
04/24/84
Operating
First Union Corporation,
Charlotte, NC
First Union Export
Trading Carpany,
Charlotte, NC
05/07/84*
Operating
*Acted upon by Reserve Banks pursuant to Delegated Authority.
3
Bank Holding Ocnpany
Export Trading Ccnpany
Date of
System Action
Current Status
Alaska Mutual Bancorporation,
Anchorage, AK
Mutual International
Corporation,
Anchorage, AK
06/06/84*
Operating
Frontier Bancorp,
Vista, CA
Interbank Trading Company,
San Diego, CA
07/30/84*
Not Activated
Florida Park Banks, Inc.
St. Petersburg, FL
Park Services
International, Inc.,
St. Petersburg, FL
09/19/84
Closed
Capital Bancorp,
Miami, FL
Capital Trade Services, Inc.,
Miami, FL
09/20/84*
Operating
CoreStates Financial
Lancaster, PA
CoreStates Export Trading
Ccmpany,
Philadelphia, PA
10/13/84*
Operating
North Valley Bancorp,
Redding, CA
Casia-Pacific Ccmpany,
Redding, CA
10/18/84*
Operating
12/18/84*
Operating
Marine Corporation,
Milwaukee, WI
Marine Financial Services, Inc , 12/31/84*
Milwaukee, WI
Operating
Ramapo Financial Corp.,
Wayne, NJ;
Ultra Bancorporation,
Bridgewater, NJ; and
New Jersey National
Corporation,
Trenton, NJ
Florida Interbank Trading
Ccmpany, Inc.,
Jacksonville, FL
01/07/85
Operating
First Wisconsin Corp.,
Milwaukee, WI
Interkontinental Trading
Co., Inc.,
Rolling Meadcws, IL
02/11/85
Operating
Garmierce Union Corporation,
Nashville, TO
Ccnmerce Trading Corporation,
Nashville, TO
03/22/85
Operating
Valley National Corporation,
Phoenix, AZ
Valley Intemation Trading
Company,
Phoenix, AZ
04/16/85*
Operating
Maryland National Corporation, MN Trade Corporation,
Baltimore, MD
Baltimore, MD
*Acted upon by Reserve Banks pursuant to Delegated Authority.
4
Bank Holding Ooqaany
Export Trading Company
Date of
System Action
Current Status
Manufacturers Hanover
Corporation,
New York, NY
Manufacturers Hanover World
Trade Corporation,
New York, NY
04/21/85*
Operating
Marine Midland Banks, Inc.,
Buffalo, NY
Marine Midland Trade, Inc.,
New York, NY
04/21/85*
Operating
United Bancorp of Arizona,
Phoenix, AZ
United Bank Export
Trading Canpany,
Phoenix, AZ
07/05/85
Operating
InterFirst Corporation,
Dallas, Texas
InterFirst World Trade
Corporation,
Dallas, Texas
04/28/86
Operating
♦Acted upon by Reserve Banks pursuant to Delegated Authority.
OTHER EXPORT TRADING COMPANY NOTIFICATIONS
Date of
1
System Action
Bank Holding Company
Export Trading Company
Security Pacific
Corporation,
Los Angeles, CA
Security Pacific
Trading Co.
01/18/84
Expand
Activities'
Society Corporation,
Cleveland, OH
Export Partnership for
Intercontinental Trade
Inc.
03/20/85
Additional
Investment
Hongkong and Shanghai
Banking Corporation,
Hong Kong
Equator Trading Co.
04/05/85
/additional
Investment
Citicorp,
New York, NY
Citicorp International
Trading Co,
04/09/85
Additional
Investment
State Street Boston
Corp.,
Boston, MA
State Street Trade
Development Co., Inc,
07/29/85
Additional
Investment
Citicorp,
New York, NY
Citicorp International
Trading Co.
11/08/85
Invest in Bonded
Collateral Management
Vehicle
State Street Boston
Corp.,
Boston, MA
State Street Trade
Development Co., Inc,
12/19/85
Additional
Investment
Chase Manhattan Corp.,
New York, NY
Chase Trade, Inc.
02/26/86
Increase Leveraging'
to 17:1
Ramapo Financial
Corp., et al.,
Wayne, NJ
Bancorps’ International
Trading Co.
05/12/86
Additional
Investment
Reguest
*In each instance, the Federal Reserve had no objection to the proposal.
2
In its notification to the Board to establish its ETC, Security Pacific sought to engage in
only limited ETC activities.
The purpose of this notification was to enable it to engage in
the full scope of the activities permitted under the BESA.
3
Technically, this request was for relief from a commitment, not an ETC notification.
@FedFRASER