[Code of Federal Regulations]
[Title 12, Volume 3, Parts 220 to 299]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR225.90]

[Page 116-117]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL (REGULATION Y)--Table of Contents
 
                 Subpart I--Financial Holding Companies
 
Sec. 225.90  What are the requirements for a foreign bank to be treated as a financial holding company?

    (a) Foreign banks as financial holding companies. A foreign bank 
that operates a branch or agency or owns or controls a commercial 
lending company in the United States, and any company that owns or 
controls such a foreign bank, will be treated as a financial holding 
company if:
    (1) The foreign bank, and any U.S. depository institution that is 
owned or controlled by the foreign bank or company, is and remains well 
capitalized and well managed; and
    (2) The foreign bank, or the company that owns the foreign bank, has 
made an effective election to be treated as a financial holding company 
under this subpart.
    (b) Standards for ``well capitalized.'' A foreign bank will be 
considered ``well capitalized'' if either:
    (1)(i) Its home country supervisor, as defined in Sec. 211.21 of the 
Board's Regulation K (12 CFR 211.21), has adopted risk-based capital 
standards consistent with the Capital Accord of the Basel Committee on 
Banking Supervision (Basel Accord);
    (ii) The foreign bank maintains a Tier 1 capital to total risk-based 
assets ratio of 6 percent and a total capital to total risk-based assets 
ratio of 10 percent, as calculated under its home country standard;
    (iii) The foreign bank maintains a Tier 1 capital to total assets 
leverage ratio of at least 3 percent; and
    (iv) The foreign bank's capital is comparable to the capital 
required for

[[Page 117]]

a U.S. bank owned by a financial holding company; or
    (2) The foreign bank has obtained a determination from the Board 
under Sec. 225.91(c) that the foreign bank's capital is otherwise 
comparable to the capital that would be required of a U.S. bank owned by 
a financial holding company.
    (c) Standards for ``well managed.'' A foreign bank will be 
considered ``well managed'' if:
    (1) Each of the U.S. branches, agencies, and commercial lending 
subsidiaries of the foreign bank has received at least a satisfactory 
composite rating at its most recent assessment;
    (2) The home country supervisor of the foreign bank considers the 
overall operations of the foreign bank to be satisfactory or better; and
    (3) The management of the foreign bank meets standards comparable to 
those required of a U.S. bank owned by a financial holding company.

[Reg. Y, 65 FR 15055, Mar. 21, 2000]