[Federal Register: August 17, 2004 (Volume 69, Number 158)]
[Notices]
[Page 51145-51150]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17au04-109] =======================================================================
----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency FEDERAL RESERVE SYSTEM FEDERAL DEPOSIT INSURANCE CORPORATION
Agency Information Collection Activities: Proposed Collection; Comment Request
AGENCIES: Office of the Comptroller of the Currency (OCC), Treasury; Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC). ACTION: Joint notice and request for comment. -------------------------------------------------------------------------------------------------------------- SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995 (44 U.S.C. chapter 35), the OCC, the Board, and the FDIC
(the ``agencies'') may not conduct or sponsor, and the respondent is
not required to respond to, an information collection unless it
displays a currently valid Office of Management and Budget (OMB)
control number. The Federal Financial Institutions Examination Council
(FFIEC), of which the agencies are members, has approved the agencies'
publication for public comment of a proposal to revise the Country
Exposure Report (FFIEC 009) and the Country Exposure Information Report
(FFIEC 009a), which are currently approved information collections. At
the end of the comment period, the comments and recommendations
received will be analyzed to determine the extent to which the FFIEC
should modify the reports. The agencies will then submit the reports to
OMB for review and approval. DATES: Comments must be submitted on or before October 18, 2004. ADDRESSES: Interested parties are invited to submit written comments to
any or all of the agencies. All comments, which should refer to the OMB
control number, will be shared among the agencies.
OCC: Comments should be sent to the Public Information Room, Office
of the Comptroller of the Currency, Mailstop 1-5, Attention: 1557-0100,
250 E Street, SW., Washington, DC 20219. Due to delays in the OCC's
mail service since September 11, 2001, commenters are encouraged to
submit comments by fax or e-mail. Comments may be sent by fax to (202)
874-4448, or by e-mail to regs.comments@occ.treas.gov. You can inspect
and photocopy the comments at the OCC's Public Information Room, 250 E
Street, SW., Washington, DC 20219. You can make an appointment to
inspect the comments by calling (202) 874-5043.
Board: You may submit comments, identified by FFIEC 009, by any of
the following methods:
Agency Web Site: http://www.federalreserve.gov Follow the instructions for submitting comments on the http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
E-mail: regs.comments@federalreserve.gov. Include docket
number in the subject line of the message.
Fax: (202) 452-3819 or (202) 452-3102.
Mail: Jennifer J. Johnson, Secretary, Board of Governors
of the Federal Reserve System, 20th Street and Constitution Avenue,
NW., Washington, DC 20551.
All public comments are available from the Board's Web site at
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, except as necessary for technical reasons. Accordingly, your comments will not be edited to remove any identifying or contact
information. Public comments may also be viewed electronically or in
paper in Room MP-500 of the Board's Martin Building (20th and C
Streets, NW.) between 9 a.m. and 5 p.m. on weekdays.
FDIC: Written comments should identify ``Information Collection
3064-0017, FFIEC 009'' as the subject and be submitted by any of the
following methods:
Agency Web site: http://www.fdic.gov/regulations/laws/federal/propose.html. E-mail: Comments @FDIC.gov. Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments, FDIC, 550 17th Street, NW., Washington, DC 20429.
Hand Delivery/Courier: Guard station at the rear of the
550 17th Street Building (located on F Street) on business days between
7 a.m. and 5 p.m.
Comments may be inspected and photocopied in the FDIC Public
Information Center, Room 100, 801 17th Street, NW., Washington, DC,
between 9 a.m. and 4:30 p.m. on business days.
A copy of the comments may also be submitted to the OMB desk
officer for the agencies: Mark Menchik, Office of Information and
Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10235, Washington, DC 20503 or electronic mail to
MMenchik@omb.eop.gov.
FOR FURTHER INFORMATION CONTACT: Additional information or a copy of
the collection may be requested from:
OCC: John Ference, Acting OCC Clearance Officer, or Camille Dixon,
(202) 874-5090, Legislative and Regulatory Activities Division, Office
of the Comptroller of the Currency, 250 E Street, SW., Washington, DC
20219.
Board: Cindy Ayouch, Federal Reserve Board Clearance Officer, (202)
452-3829, Division of Research and Statistics, Board of Governors of
the Federal Reserve System, 20th and C Streets, NW., Washington, DC
20551. Telecommunications Device for the Deaf (TDD) users may call
(202) 263-4869, Board of Governors of the Federal Reserve System, 20th
and C Streets, NW., Washington, DC 20551.
FDIC: Leneta G. Gregorie, Counsel, (202) 898-3719, Legal Division,
Federal Deposit Insurance Corporation, 550 17th Street NW., Washington,
DC 20429.
[[Page 51146]]
SUPPLEMENTARY INFORMATION: Proposal to revise the following currently
approved collections of information:
Report Title: Country Exposure Report and Country Exposure
Information Report.
Form Number: FFIEC 009 and FFIEC 009a.
Frequency of Response: Quarterly.
Affected Public: Business or other for profit.
OCC: OMB Number: 1557-0100.
Estimated Number of Respondents: 21 (FFIEC 009), 21 (FFIEC 009a).
Estimated Average Time per Response: 30 burden hours (FFIEC 009),
5.25 burden hours (FFIEC 009a).
Estimated Total Annual Burden: 2,520 burden hours (FFIEC 009), 441
burden hours (FFIEC 009a). Board: OMB Number: 7100-0035.
Estimated Number of Respondents: 31 (FFIEC 009), 16 (FFIEC 009a).
Estimated Average Time per Response: 30 burden hours (FFIEC 009),
5.25 burden hours (FFIEC 009a).
Estimated Total Annual Burden: 3,720 burden hours (FFIEC 009), 336
burden hours (FFIEC 009a). FDIC: OMB Number: 3064-0017.
Estimated Number of Respondents: 22 (FFIEC 009), 22 (FFIEC 009a).
Estimated Average Time per Response: 30 burden hours (FFIEC 009),
5.25 burden hours (FFIEC 009a).
Estimated Total Annual Burden: 2,640 burden hours (FFIEC 009), 462
burden hours (FFIEC 009a). General Description of Reports These information collections are mandatory: 12 U.S.C. 161 and 1817
(national banks), 12 U.S.C. 248(a), 1844(c), and 3906 (State member
banks and bank holding companies); and 12 U.S.C. 1817 and 1820 (insured
State nonmember commercial and savings banks). The FFIEC 009
information collection is given confidential treatment (5 U.S.C.
552(b)(4) and (b)(8)). The FFIEC 009a information collection is not
given confidential treatment. Abstract The Country Exposure Report (FFIEC 009) is filed quarterly with the
agencies and provides information on international claims of U.S. banks
and bank holding companies that is used for supervisory and analytical
purposes. The information is used to monitor country exposure of banks
to determine the degree of risk in their portfolios and the possible
impact on U.S. banks of adverse developments in particular countries.
The Country Exposure Information Report (FFIEC 009a) is a supplement to
the FFIEC 009 and provides publicly available information on material
foreign country exposures (all exposures to a country in excess of 1
percent of total assets or 20 percent of capital, whichever is less) of
U.S. banks and bank holding companies that file the FFIEC 009 report.
As part of the Country Exposure Information Report, reporting
institutions must also furnish a list of countries in which they have
lending exposures above 0.75 percent of total assets or 15 percent of
total capital, whichever is less. Current Action The agencies propose to revise the FFIEC 009 in order to harmonize
U.S. data with data on cross-border exposures collected by other
countries and disseminated by the Bank for International Settlements
(BIS) as their ``consolidated banking statistics.'' The proposed
revisions should also provide additional information about U.S. banks'
exposure to country risk, transfer risk, and foreign-exchange risk. The
proposed revisions would collect additional detail on foreign-office
claims of U.S. banks on local residents, including sector breakdowns
and a currency split; a split between commitments and guarantees plus
credit derivatives; and trade finance after adjustments for collateral
and guarantees. Under the proposal, the definition of the public (i.e.,
government) sector would be brought into agreement with the definition
used in the Consolidated Reports of Condition and Income (Call Report)
(forms FFIEC 031 and FFIEC 041) that banks file quarterly. No changes
to the FFIEC 009a are proposed, although the change in the definition
of the public sector on the FFIEC 009 would change the amounts reported
in Columns 6 and 7 of the FFIEC 009a by corresponding amounts. The
instructions to the FFIEC 009a reporting form would need to be changed,
however, to reflect column changes on the FFIEC 009. In addition,
comments are requested on the way claims are adjusted for collateral
and guarantees.
In proposing these revisions, the FFIEC has attempted to be mindful
of the fact that some of the revisions may increase reporting burden
for reporters. In light of this, the FFIEC has looked for areas in
which reporting burden might be reduced. As a consequence, the proposed
revisions drop a number of items from the report. For example,
reporters are no longer asked to report: Total cross-border claims on
an immediate-counterparty basis, the maturity of claims in the one-to-
five-year and over-five-year categories, risk redistribution of claims
on the public sector separately from the non-bank private sector,
commitments on an immediate-counterparty basis, and risk
redistributions for commitments.
The agencies propose to implement changes to the FFIEC 009
effective with the March 2005 report date. International Harmonization As noted above, one of the reasons for requesting changes to the
FFIEC 009 is to increase the degree of harmonization between U.S. data
and data collected by other countries' central banks. Together, these
data make up the BIS consolidated banking statistics, which are
compiled by the BIS from data submitted by the G-10 \1\ central banks
and a number of other developed and developing country central banks.
Beginning as of December 2004, the BIS will implement enhancements to
these statistics. The enhancements will provide users with more data on
an ``ultimate-risk'' basis--i.e., after adjusting for collateral and
third-party guarantees--including details on local claims and
commitments and guarantees. Most of the participating central banks,
including all of the G-10 central banks, agreed to collect the new
data, and also to harmonize their existing data more closely with BIS
guidelines. Therefore, some of the proposed revisions are intended to
collect the new data that the BIS will begin compiling and other
revisions are intended to bring U.S. data into agreement with the
current BIS guidelines. As a result, when the enhanced statistics are
implemented, they will reflect a significant harmonization of country
exposure data across countries.
--------------------------------------------------------------------------- \1\ The Group of Ten is made up of eleven industrial countries
(Belgium, Canada, France, Germany, Italy, Japan, the Netherlands,
Sweden, Switzerland, the United Kingdom and the United States) which
consult and cooperate on economic, monetary and financial matters.
--------------------------------------------------------------------------- As a general rule, it is desirable for the United States to comply
with international data collection efforts, especially when doing so
does not cause undue burden on U.S. reporting institutions. The cost of
complying with the new statistics will be considerably less for U.S.
reporters than for reporters in many countries, because most of the
data needed for the enhancements to the BIS statistics was already
collected on the FFIEC 009, whereas many countries must collect a large
amount of new data. U.S. compliance helps create international data
that are comparable [[Page 51147]] across countries and are, therefore, more useful. If the United States
were not to collect these additional data, it would be the only large
country not in almost full compliance with the new statistics. Proposed Revisions to the FFIEC 009 Reporting Form Schedule 1: Country Exposure Report (Excluding Foreign Exchange and
Derivative Products)
1. Redefine columns 1, 2, and 3. ``Cross-Border Claims'' by
``Banks'' (column 1), ``Public'' (column 2), and ``Other'' (column 3)
would include ``Foreign-Office Claims on Local Residents in Non-Local
Currency'' and would exclude local claims in the domestic currency
subject to a risk reallocation. This change would improve, in a way
that adds the least number of columns to the reporting form,
harmonization of international data by bringing U.S. data into
agreement with the BIS guidelines for the consolidated banking
statistics. This change does not alter, nor does it reflect a change
in, the definitions of country, cross-border, or transfer risks. Cross-
border claims on an immediate-counterparty basis would be calculated as
the sum of these columns less the proposed column 5. (See ``5. Add a
column.'' below.)
2. Delete column 4. ``Cross-Border Claims: Total'' (column 4) would
be deleted in order to lower reporting burden. Total cross-border
claims on an ultimate-risk basis are considerably more useful than
immediate-counterparty data for assessing banks' exposure to country
risk and can be calculated from the proposed reporting form.
3. Redefine and renumber column 5. ``Cross-Border Claims: Estimated
Breakdown of Column (4) by Time Remaining to Maturity: One Year and
Under'' (column 5) would include ``Foreign-Office Claims on Local
Residents in Non-Local Currency.'' This change would improve, in a way
that adds the least number of columns to the reporting form,
harmonization of international data by bringing U.S. data into
agreement with the BIS guidelines for the consolidated banking
statistics. This change does not alter, nor does it reflect a change
in, the definitions of country, cross-border, or transfer risks. Column
5 would be renumbered to column 4 on the proposed reporting form.
4. Delete columns 6 and 7. ``Cross-Border Claims: Estimated
Breakdown of Column (4) by Time Remaining to Maturity'' for ``Over One
Year to Five Years'' (column 6) and ``Over Five Years'' (column 7)
would be deleted in order to lower reporting burden. In addition, the
distinction between the two maturity buckets is considered to be of
marginal usefulness.
5. Add a column. The proposed column, ``Immediate-Counterparty
Basis: Foreign-Office Claims on Local Residents in Local Currency''
(column 5), would be added to increase harmonization of international
data by bringing U.S. data into agreement with BIS guidelines.
6. Rename and renumber column 8. ``Cross-Border Claims: Claims
Reported in Columns 1-3 with Head Office/Guarantor Located in Another
Country'' by ``Bank'' (column 8) would be renamed and renumbered
``Redistribution of Claims To Adjust for Ultimate Risk: Outward Risk
Transfers of Claims Reported in Columns 1, 2, 3 and 5 or on U.S.
Residents'' by ``Claims on Banks'' (column 6) on the proposed reporting
form.
7. Combine columns 9 and 10. ``Cross-Border Claims: Claims Reported
in Columns 1-3 with Head Office/Guarantor Located in Another Country''
by ``Public'' (column 9) and ``Other'' (column 10) would be combined
into ``Redistribution of Claims To Adjust for Ultimate Risk: ``Outward
Risk Transfers of Claims Reported in Columns 1, 2, 3 and 5 or on U.S.
Residents'' by ``Claims on Non-Banks'' (column 7) on the proposed
reporting form. Distinguishing between risk redistributions to the
public and the non-bank private sectors is considered to be of marginal
usefulness, so the proposed reporting form combines these columns in
order to lower reporting burden.
8. Rename and renumber column 11. ``Cross-Border Claims:
Redistribution of Guaranteed Amounts Reported in Columns 8-10 to
Country of Head Office/Guarantor'' by ``Bank'' (column 11) would be
renamed and renumbered ``Redistribution of Claims To Adjust for
Ultimate Risk: Inward Risk Transfers of Claims Reported in Columns 6
and 7'' by ``Claims on Banks'' (column 8) on the proposed reporting
form.
9. Combine columns 12 and 13. ``Cross-Border Claims: Redistribution
of Guaranteed Amounts Reported in Columns 8-10 to Country of Head
Office/Guarantor'' by ``Public'' (column 12) and ``Other'' (column 13)
would be combined into ``Redistribution of Claims to Adjust for
Ultimate Risk: Inward Risk Transfers of Claims Reported in Columns 6
and 7'' by ``Claims on Non-Banks'' (column 9) on the proposed reporting
form. Distinguishing between risk redistributions to the public and the
non-bank private sectors is considered to be of marginal usefulness, so
the proposed reporting form combines these columns in order to lower
reporting burden.
10. Renumber column 14. ``Net Due to (or Due from) Own Related
Offices in Other Countries'' (column 14) would become a Memorandum Item
and be renumbered to column 21 on the proposed reporting form.
11. Delete column 15. ``Commitments'' (column 15) would be deleted
in order to lower reporting burden. Immediate-counterparty commitments
and guarantees are considered to be less useful than the ultimate-risk
data.
12. Delete columns 16 and 17. ``Commitments in Column (15) Head
Office/Guarantor in Another Country'' (column 16) and ``Redistribution
of Commitments in Column (16) to Country of Head Office/Guarantor''
(column 17) would be deleted in order to lower reporting burden. The
primary use for these columns was to compute commitments and guarantees
on an ultimate-risk basis.
13. Add three columns. The proposed columns, ``Ultimate-Risk Basis:
Cross-Border Claims'' by ``Banks'' (column 10), ``Public'' (column 11),
and ``Other'' (column 12), would be added to collect directly data that
must be calculated from the current reporting form, but that would not
be able to be calculated from the proposed reporting form. Using the
current reporting form, cross-border claims on an ultimate-risk basis
(i.e., after adjusting for guarantees and collateral) are calculated by
adding the data in Columns 1, 2, 3, 11, 12, and 13 and subtracting the
data in Columns 8, 9, and 10. These data are and will continue to be
the one of the key numbers on the E.16 Statistical Release, Country
Exposure Lending Survey, and are used for country risk analysis. The
data will also continue to be the basis for the amounts reported on the
FFIEC 009a. Other than the change in the definition of the public
sector, there should be no difference between the amounts reported in
these proposed columns and the amounts that would be calculated from
the data on the current reporting form.
14. Split column 18 into three columns. ``Local Country Claims on
Local Residents'' (column 18) would be split into three columns,
``Ultimate-Risk Basis: Foreign-Office Claims on Local Residents'' by
``Banks'' (column 13), ``Public'' (column 14), and ``Other'' (column
15), on the proposed reporting form. These columns would collect a
breakdown of foreign-office claims on local residents by sector of the
ultimate obligor. This breakdown would increase [[Page 51148]] harmonization of international data by bringing U.S. data into
agreement with the BIS guidelines for the consolidated banking
statistics. It would also improve the ability of U.S. data users to
evaluate the exposures of foreign offices of U.S. banks to local
residents.
15. Add a column. The proposed column, ``Ultimate-Risk Basis:
Foreign-Office Claims on Local Residents: Breakdown of Total of Columns
13, 14, and 15: Claims in Non-Local Currency'' (column 16), would be
added to improve the ability of U.S. data users to evaluate the
exposures of foreign offices of U.S. banks to local residents.
16. Add two columns. The proposed columns, ``Ultimate-Risk Basis:
Cross-Border and Foreign-Office Commitments and Guarantees'' by
``Commitments'' (column 17) and ``Guarantees and Credit Derivatives''
(column 18), would be added on the proposed reporting form. These
proposed columns differ in two ways from commitments on an ultimate-
risk basis that are derived from columns 15, 16, and 17 on the current
reporting form (by adding columns 15 and 17 and then subtracting column
16). First, on the current reporting form, commitments are combined
indistinguishably with guarantees (including credit derivatives);
whereas on the proposed reporting form, commitments and guarantees
(including credit derivatives) would each be reported separately.
Second, the current reporting form collects only cross-border
commitments and guarantees, whereas the proposed reporting form would
collect cross-border commitments and guarantees plus foreign-office
commitments to and guarantees on local residents. The proposed columns
would increase harmonization of international data by bringing U.S.
data into agreement with the BIS guidelines. In addition, the inclusion
of foreign-office commitments to and guarantees on local residents
would provide a more complete picture of the contingent exposures of
U.S. banks to foreign residents. The breakout of commitments from
commitments and guarantees (plus credit derivatives) would provide a
more useful picture of the exposures of U.S. banks to foreign
residents, because commitments have a different purpose and are likely
to have a different risk profile than guarantees.
17. Split column 19 into two columns. ``Local Country Liabilities''
(column 19) would be split into two columns, ``Foreign-Office
Liabilities in Non-Local Currency'' (column 19) and ``Foreign-Office
Liabilities in Local Currency'' (column 20), on the proposed reporting
form. Foreign office liabilities represent legal obligations of a
foreign office and for which no payment is guaranteed at locations
outside of the country of the office. Collecting foreign-office
liabilities in local currency achieves greater harmonization of
international data, by bringing U.S. data into greater agreement with
BIS guidelines. In addition, data on foreign-office liabilities in
local currency, together with the information collected in proposed
columns 13, 14, 15, and 16 from which one can derive foreign-office
claims on local residents in local currency, gives data users
information about the net exposures of foreign offices of U.S. banks to
local residents in local currency. The total of the two proposed
columns--total foreign-office liabilities--is needed in order to
calculate net local claims that is currently reported in column 2 of
the FFIEC 009a.
18. Rename and renumber column 20. ``Amounts Reported in Column (4)
After Adjustments in Columns (8-13) that Represent Assets Held for
Trading'' (column 20) would be renamed and renumbered ``Amounts
Reported in Columns 10, 11, and 12 that are Assets Held for Trading''
(column 22) on the proposed reporting form.
19. Redefine and renumber column 21. ``Trade Financing Reported in
Columns (4) and (15)'' (column 21) would change to ``Amounts Reported
in Columns 10, 11, 12, 17, and 18 that are Trade Finance'' (column 23).
The proposed column differs from what is currently collected because
the data would be collected on an ultimate-risk basis rather than
immediate-counterparty basis. On the current reporting form, trade
financing is to be reported for claims reported in columns 1, 2, 3, 4,
and 15--i.e., for cross-border claims and commitments (plus guarantees
and credit derivatives) on an immediate-counterparty basis. On the
proposed reporting form, it would be reported for cross-border claims
and cross-border and foreign-office commitments and guarantees (plus
credit derivatives) on an ultimate-risk basis. This change makes the
reporting of trade finance more comparable with data on bank claims on
an ultimate-risk basis. Proposed Revisions to the FFIEC 009 Reporting Form Schedule 2: Country Exposure Report--Foreign Exchange and Derivative
Products
There are no revisions of substance that are proposed for Schedule
2. However, two changes are proposed for the language used in Schedule
2.
1. Replace ``Revaluation Gains'' and ``Revaluation Losses'' with
``Positive Fair Values'' and ``Negative Fair Values.'' These changes
are made for clarity, and are not intended to change the amounts
reported on the form.
2. Rename columns 6 and 7. ``Local Country Claims on Local
Residents'' (column 6) would be renamed ``Foreign Office Claims on
Local Residents'' and ``Local Country Liabilities'' (column 7) would be
renamed ``Foreign Office Liabilities.'' The new terminology is more
descriptive of what is being collected. No change is proposed to the
definition of what is to be reported. Proposed Revisions to the FFIEC 009 Instructions--Schedule 1 1. Change instructions so that claims are reported in columns 1, 2,
3, and 5 on only an immediate-counterparty basis--i.e., according to
the country of residence and sector of the borrower. The current FFIEC
009 instructions state that columns 1 through 7 should include, in
addition to cross-border claims, ``foreign office local and non-local
currency claims on local residents that are guaranteed by residents of
other countries,'' which are reported according to the country of
residence of the guarantor, and that in Columns 1, 2, and 3, ``if the
credit is guaranteed by another sector in the same country, report the
amount in the sector to which the respondent looks for the ultimate
source of repayment.'' The proposed reporting form drops these
instructions, and by doing so, would produce a more accurate measure of
claims on an immediate-counterparty basis. This change would increase
the harmonization of international data by bringing U.S. data into
agreement with the BIS guidelines for the consolidated banking
statistics.
2. Redefine public sector to conform to that used in the Call
Reports. The definition of the public sector (used for columns 2, 9,
and 12) in the current FFIEC 009 instructions is broader than the
definition used in the Call Report instructions. The revised
instructions would change the definition to conform to that used in the
Call Report. Specifically, claims on government-owned commercial firms,
which are defined as claims on the public sector under the current
instructions, would not be considered to be claims on the public sector
under the proposed revisions. This change, by achieving consistency of
definitions with the Call Report, should reduce reporting burden. In
addition, this change increases harmonization of international data,
because this is the same definition recommended in the BIS guidelines. [[Page 51149]] The definition has the added advantage of logical consistency, because
it treats government-owned commercial firms in the same manner as
government-owned banks, which are excluded from the public sector under
the current instructions. The ``other'' sector category (column 3, 10,
and 13) is a residual category. Thus, changing the definition of the
public sector would result in a change in the amounts reported in the
``other'' sector columns as well. The definition of the banking sector
would not change.
Reporting institutions should note that the redefinition of the
public sector, described above in the context of Schedule 1, would also
affect the reporting of claims on the public sector in Schedule 2.
3. Change instructions to measure more accurately the
redistribution of claims to adjust for ultimate risk (Columns 8 through
13). Columns 8 through 13 on the current reporting form reflect the
redistribution of only cross-border claims, whereas the redistribution
of foreign-office claims on local residents is included
indistinguishably with cross-border claims. Under the proposed
revisions, these columns would include the redistribution of cross-
border claims and foreign-office claims on local residents. In
addition, under the proposed revisions, within-country, inter-sectoral
risk transfers should be reported, whereas the current instructions
state that claims that are guaranteed by a resident of the same country
as the borrower should be reported according to the sector of the
guarantor, rather than that of the borrower. Together, these changes
mean that these columns would fully reflect risk redistributions,
thereby increasing the transparency of data reported by U.S. banks. The
changes would also increase harmonization of international data by
bringing U.S. data into agreement with the BIS guidelines for the
consolidated banking statistics. Proposed Revisions to the FFIEC 009 Instructions--Schedule 2 1. Change instructions so that exposures from derivative contracts
are reported for all derivative contracts, not just for derivative
contracts held for trading. The current instructions ask that
revaluation gains on, i.e., positive fair values of, derivative
contracts be reported for only those contracts held for trading. This
change would improve the ability of U.S. data users to assess the
exposures of U.S. banks to foreign residents. Comments The FFIEC would like to solicit comments on the following issues
related to the FFIEC 009, Schedule 1.
1. Request comment on whether the instructions for risk
redistributions should be changed with regard to the treatment of
resale agreements. In the proposed instructions (as in the current
instructions), resale agreements are treated as collateralized claims--
i.e., a claim on the counterparty that is collateralized by the asset
that is to be resold. The proposed instructions for risk transfers in
the presence of collateral are:
Collateral is treated as a ``guarantee'' of a claim if the
collateral is: (a) Tangible, liquid, and readily-realizable and (b) is
both held and realizable outside of the country of residence of the
borrower. Collateral can include investment grade debt instruments and
regularly traded shares of stocks. In cases involving collateral other
than stocks and debt securities, the sector and country of the
``guaranteeing'' party is the sector and country of residence of the
institution holding the collateral. If the collateral is stocks or debt
securities, the sector and country of the ``guaranteeing'' party is the
sector and country of residence of the party issuing the security.
If the collateral consists of a basket of convertible currencies or
investment grade securities of different countries, the exposure may be
reported on the ``Other'' line (for example, ``other Latin America'')
that most closely represents the geographical composition of the
basket.
Comments are invited as to whether these proposed instructions
should be modified such that a risk transfer is reported for resale
agreements only if the country of the collateral (the asset to be
resold) has a better risk rating than that of the immediate-
counterparty.
2. Request comment on whether the instructions for risk
redistributions should be changed with regard to the treatment of
repayment structures that may mitigate transfer risk. Specifically, a
bank may be able to structure a credit in a manner in which the primary
source of repayment is not subject to transfer or country risks.
Examples include transactions with local subsidiaries of multinationals
that are structured to capture the cash flow from trade transactions
outside of the country of the immediate-counterparty. Comments are
invited on possible changes to the instructions to account for such
issues, the analytical justification for making such changes, and the
ability of reporters to comply with such instructions.
3. Request comment on the desirability of adding a column to
collect foreign-office liabilities by country of residence of the
creditor, which would be reported by only those institutions that meet
the criteria to file the Quarterly Report of Assets and Liabilities of
Large Foreign Offices of U.S. Banks (FR 2502q). Currently, thirty-eight
institutions that file the FFIEC 009 also file 153 separate FR 2502q
reports, one for each country of their foreign branches and each
country of their foreign subsidiaries. On the FR 2502q, they report
liabilities (and assets) by country of residence of the creditor (and
borrower). This information is extremely useful to the Board and the
U.S. Treasury Department when the U.S. government needs to review the
magnitude of claims of foreign residents on U.S. banks, particularly at
times of international crisis. If this additional column was added to
the FFIEC 009, then the FR 2502q could be scaled back to collect data
from foreign offices located only in off-shore financial centers. This
would reduce the number of FR 2502q reports that would need to be filed
by FFIEC 009 reporters from 153 to 56, reducing reporting burden, on
net, for these reporters. Reporting burden for FFIEC 009 reporters that
do not currently report the FR 2502q would not change, because they
would be exempted from reporting this column.
The FFIEC would like to solicit comments on the following issue
related to the FFIEC 009, Schedule 2.
4. Request comment on possible reporting of potential future credit
exposures of derivative contracts. Specifically, comments are requested
on the usefulness of data on potential future credit exposures of
derivative contracts on a credit equivalency basis (following the U.S.
risk-based capital standards), and the burden of reporting such data. Request for Comment Comments are invited on:
a. Whether the information collections are necessary for the proper
performance of the agencies' functions, including whether the
information has practical utility;
b. The accuracy of the agencies' estimates of the burden of the
information collections, including the validity of the methodology and
assumptions used;
c. Ways to enhance the quality, utility, and clarity of the
information to be collected;
d. Ways to minimize the burden of information collections on
respondents, [[Page 51150]] including through the use of automated collection techniques or other
forms of information technology; and
e. Estimates of capital or start up costs and costs of operation,
maintenance, and purchase of services to provide information.
Comments submitted in response to this notice will be shared among
the agencies. All comments will become a matter of public record.
Written comments should address the accuracy of the burden estimates
and ways to minimize burden including the use of automated collection
techniques or the use of other forms of information technology as well
as other relevant aspects of the information collection request. Dated: August 5, 2004. Stuart Feldstein,
Assistant Director, Legislative and Regulatory Activities Division,
Office of the Comptroller of the Currency.
Board of Governors of the Federal Reserve System, August 11,
2004.
Jennifer J. Johnson,
Secretary of the Board.
Dated at Washington, DC, this 6th day of August, 2004. Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. 04-18751 Filed 8-16-04; 8:45 am] BILLING CODE 4810-33-P
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