[Federal Register Volume 59, Number 112 (Monday, June 13, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14263]
[[Page Unknown]]
[Federal Register: June 13, 1994]
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FEDERAL DEPOSIT INSURANCE CORPORATION
FEDERAL RESERVE SYSTEM
Banco Bilbao; Acquisition of Company Engaged in Permissible
Nonbanking Activities
Banco Bilbao Vizcaya, S.A., Bilbao, Spain (Applicant), a foreign
banking organization subject to the Bank Holding Company Act (BHC Act),
has applied pursuant to section 4(c)(8) of the BHC Act and Sec.
225.23(a)(2) and (3) of the Board's Regulation Y (12 CFR 225.23(a)(2)
and (3)), to retain an interest in its indirect subsidiary, Probursa
International Incorporated, New York, New York (Company), and thereby
engage in the following securities-related activities:
(1) providing investment advisory services pursuant to Sec.
225.25(b)(4) of the Board's Regulation Y (12 CFR 225.25(b)(4));
(2) providing full service brokerage services pursuant to Secs.
225.25(b)(4) and (b)(15) of Regulation Y (12 CFR 225.25(b)(4) and
(b)(15)), including exercising investment discretion on behalf of
institutional customers;
(3) buying and selling, on the order of customers, all types of
securities as a riskless principal; and
(4) engaging in the private placement of all types of securities as
agent.
Section 4(c)(8) of the BHC Act provides that a bank holding company
may, with Board approval, engage in any activity ``which the Board,
after due notice and opportunity for hearing, has determined (by order
or regulation) to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.'' This statutory
test requires that two separate tests be met for an activity to be
permissible for a bank holding company. First, the Board must determine
that the activity is, as a general matter, ``closely related to
banking.'' Second, the Board must find in a particular case that the
performance of the activity by the applicant bank holding company may
be reasonably be expected to produce public benefits that outweigh
possible adverse effects.
The Board previously has determined by regulation that the proposed
investment advisory and full-service brokerage activities are closely
related to banking under section 4 of the BHC Act. See 12 CFR
225.25(b)(4) and (b)(15). Applicant has committed that it will conduct
these activities in accordance with the Board's limitations and
restrictions on the conduct of such activities. The Board also has
previously determined that the proposed riskless principal and private
placement activities are closely related to banking, subject to certain
prudential limitations on the conduct of such activities which address
the potential for conflicts of interest, unsound banking practices, and
other adverse effects. See, e.g., J.P. Morgan & Company Inc., 76
Federal Reserve Bulletin 26 (1990); Bankers Trust New York Corporation,
75 Federal Reserve Bulletin 829 (1989). Applicant has committed to
conduct the proposed riskless principal and private placement
activities subject to the conditions and limitations contained in these
and other Board orders approving these activities.
In order to satisfy the proper incident to banking test, section
4(c)(8) of the BHC Act requires the Board to find that the performance
of the activities by Company can reasonably be expected to produce
benefits to the public, such as greater convenience, increased
competition, or gains in efficiency that outweigh possible adverse
effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest, or unsound banking practices.
Applicant believes that the proposed activities will benefit the public
by promoting competition and by providing a wider range of services and
added convenience to Company's customers. Thus, Applicant believes that
the proposed activities will result in benefits to the public that
would outweigh any adverse effects associated with the proposal.
In publishing the proposal for comment, the Board does not take a
position on issues raised by the proposal. Notice of the proposal is
published solely in order to seek the views of interested persons on
the issues presented by the application and does not represent a
determination by the Board that the proposal meets, or is likely to
meet, the standards of the BHC Act.
Any views or requests for hearing should be submitted in writing
and received by William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, Washington, DC 20551, not later than July 6,
1994. Any request for hearing on this application must, as required by
Sec. 262.3(e) of the Board's Rules of Procedure (12 CFR 262.3(e)), be
accompanied by a statement of the reasons why a written presentation
would not suffice in lieu of a hearing, identifying specifically any
questions of fact that are in dispute, summarizing the evidence that
would be presented at a hearing, and indicating how the party
commenting would be aggrieved by approval of the proposal.
This application may be inspected at the offices of the Board of
Governors or the Federal Reserve Bank of New York.
Board of Governors of the Federal Reserve System, June 7, 1994.
Jennifer J. Johnson,
Associate Secretary of the Board.
[FR Doc. 94-14263 Filed 6-10-94; 8:45 am]
BILLING CODE 6210-01-F