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FEDERAL RESERVE BANK OF NEW YORK fit 2^ January 9, 1984 PROPOSED CHANGES IN COUNTRY EXPOSURE REPORT To All State Member Banks, and Others Concerned, in the Second Federal Reserve District: The following statement has been issued by the Federal Financial Institutions Examination Council: The Examination Council has announced that it is seeking public comment on proposed new report ing requirements to implement the provisions of the International Lending Supervision Act of 1983. The Act requires public disclosure of material foreign country exposures by commercial banks. A proposed new “Country Exposure Information Report” would be prepared on a “net” basis, i.e ., after adjust ments for reallocation of transfer risk. The report would be filed quarterly as a supplement to the Country Exposure Report. The Council also is seeking comment on a proposed new memorandum item in the Country Expo sure Report that would reflect amounts of exposure that are covered by guarantees from the U.S. Gov ernment and its agencies. The current memorandum item showing foreign office non-local currency claims would be deleted. * * * Printed on the reverse side is an excerpt from the F e d e r a l R e g i s t e r of December 23, 1983, containing the text of the Council’s notice. Comments on the Council’s proposals should be submitted by January 23, 1984 and may be sent to Thomas P. McQueeney, Assistant Chief Examiner in our Bank Examinations Department. A n t h o n y M. S o l o m o n , P r e s id e n t. (OVER) F E D E R A L FIN A N C IA L IN STITU TIONS EXAM IM ATIQM CO U N CIL Quarterly Report of Country Exposure by U.S. Banking Organizations A G E N C Y : Federal Financial Institutions Examination Council (FFIEC). a c t i o n : Notice of request for comments on reporting requirements. SUMMARY: The FFIEC proposes to revise the Country Exposure Report effective March 31,1984 in order to implement certain public disclosure provisions of the International Lending Supervision Act of 1983. A new two-part summary report, the Country Exposure Information Report, is being proposed. This new report would be filed as an attachment to the present Country Exposure Report, and the information in the new report would be disclosed to the public upon request. In addition, the FFIEC proposes to replace the current memorandum item in the Country Exposure Report with a memorandum item that would show for each country the amounts of exposure that are covered by guarantees from the U.S. Government and its agencies. d a t e : Comments must be received on or before January 23,1984. A D D R E S S : Comments may be mailed to Robert J. Lawrence, Executive Secretary, Federal Financial Institutions Examination Council, 490 L’Enfant Plaza, SW, Eighth Floor, Washington, DC 20219. F O R F U R T H E R IN F O R M A T IO N C O N T A C T : Robert R. Bench, Office of the Comptroller of the Currency, Washington, DC 20219, [202] 447-1699; Frederick R. Dahl, Federal Reserve Board, Washington, DC. 20551, (202) 452-2726; Edward T. Lutz, Federal Deposit Insurance Corporation, Washington, DC 20429, (202) 389-4512. S U P P L E M E N T A R Y IN F O R M A T IO N : The FFIEC, pursuant to section 1006 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3305), proposes to revise the Country Exposure Report, form FFIEC009, effective March 31,1984. The report is authorized by section 11a of the Federal Reserve Act (12 U.S.C. 248a), section 5(c) of the Bank Holding Company Act of 1956 (12 U.S.C. 1844c), the National Bank Act as amended (12 U.S.C. section 1 et seq.: 12 U.S.C. 161), section 7 and 10 of the Federal Deposit Insurance Act (12 U.S.C. 1817 and 1820), and section 907 of the International Lending Supervision Act of 1983. The FFIEC is proposing two changes in the reporting requirement. First, a new two-part summary report, the Country Exposure Information Report (see below), is being proposed. Part A of this report would provide certain information on foreign country exposures to any country that exceeds 1 percent of the reporting bank’s assets. Part B would provide less detailed information on such exposures that exceed 0.75 percent, but do not exceed 1 percent, of the reporting bank’s assets. This information w’ould be disclosed to the public on request and is similar to new disclosure requirements recently adopted by the Securities and Exchange Commission. The new information report would be filed as an attachment to the present Country Exposure Report. The second proposed change relates to the memorandum item in FFIEC-009. The present memorandum item shows foreign office non-local currency claims and has been collected to allow adjustments to the data for international statistical purposes. That information will no longer be needed after December and deletion of the item is proposed. Another memorandum item is proposed as a replacement. The new memorandum item would show for each country the amounts of exposure that are covered by guarantees from the U.S. Government and its agencies. This information has not been readily available, which has hampered analysis of problem debt situations. The International Lending Supervision Act of 1983 states that the Federal banking agencies shall require banking institutions to submit at least four times a year information on their foreign country exposures. It further states that the Federal banking agencies shall require banking institutions to disclose to the public material foreign country exposures. The agencies are required to implement these provisions within 120 days after enactment of the legislation. .The FFIEC has already approved changes in the instructions to the Country Exposure Report to require that the report be submitted quarterly, instead of semi-annually, beginning in March 1984. To improve the timeliness of the information, the FFIEC has also approved a reduction in the filing time from 60 days after the reporting date to 45 days. These changes have not yet been approved by the Office of Management and Budget. A new, two-part summary report, the Country Exposure Information Report (see below), is being proposed as a means of meeting the second statutory requirement cited. The standard of materiality chosen for reporting foreign country exposures for public disclosure purposes is 1 percent of total assets. This corresponds to the standard recently adopted by the Securities and Exchange Commission for its disclosure requirements on international lending. Comments are invited on the choice of this standard. The proposed report requests that aggregate data, and information on its sectoral and maturity distribution, be supplied on a net basis—that is, after adjustments for reallocation of transfer risk. Detailed information has not previously been reported on this basis, but the Council believes that such data would provide the most meaningful measure of exposure. Comments are especially invited on this aspect of the proposed report. Dated: D ecem b er 20,1983. Robert J. Lawrence, Executive Secretary, FFIEC. Country Exposure Information Report Part A. Information on exposures (after adjustments for guarantees) to any country that exceed 1 percent of total assets. Adjusted cross-border and foreign office non-local currency dams Amount of net local currency claims included in column (1) (D Country Claims outstanding after mandated adjustments for transfer of exposure (2) Amount maturing in Total Column 1 minus 2 (3) To banks To public sector entities To other Less than 1 year More than 1 year (4) (5) (6) (7) (8) Part B. Information on exposures (after adjustments for guarantees) to any country that exceed 0.75 percent, but do not exceed 1 percent, of total assets. List of countries where exposure is within these R its m [FR Doc. 83-34154 Filed 12-22-83; 8:45 am] BILUW CODS 6210-01-M G Total amount of exposure to all countries listed
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