[Federal Register Volume 60, Number 244 (Wednesday, December 20, 1995)]
[Rules and Regulations]
[Pages 66042-66045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30664]




[[Page 66041]]

_______________________________________________________________________

Part VI

Department of the Treasury
Office of the Comptroller of the Currency



12 CFR Part 3

Federal Reserve System



12 CFR Parts 208 and 225

Federal Deposit Insurance Corporation



12 CFR Part 325



_______________________________________________________________________



Capital; Capital Adequacy Guidelines; Joint Final Rule

  Federal Register / Vol. 60, No. 244 / Wednesday, December 20, 1995 / 
Rules and Regulations  

[[Page 66042]]


DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 3

[Docket No. 95-28]
RIN 1557-AB14

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 225

[Regulations H and Y; Docket No. R-0849]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 325

RIN 3064-AB54


Capital; Capital Adequacy Guidelines

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 final rule.

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SUMMARY: The OCC, Board, and the FDIC (Agencies) are amending their 
respective risk-based capital guidelines to modify the definition of 
the OECD-based group of countries. The amendment excludes from the 
OECD-based group of countries any country that has rescheduled its 
external sovereign debt within the previous five years. The amendment 
also clarifies that the OECD-based group of countries includes all 
countries that are members of the OECD, regardless of their date of 
entry into the OECD. The effect of the amendment would be to increase 
the amount of capital that banks are required to hold against claims on 
the governments and banks of an OECD country, in the event that the 
country were to reschedule its external sovereign debt. This action is 
being taken to conform with a change in the Basle Accord on risk-based 
capital that was adopted by the Basle Committee on Banking Supervision 
(Basle Committee) on April 15, 1995.

EFFECTIVE DATE: April 1, 1996.

FOR FURTHER INFORMATION CONTACT: OCC: Geoffrey White, Senior 
International Economic Advisor, International Banking and Finance 
Department, (202) 874-5235; Saumya Bhavsar, Attorney, Legislative and 
Regulatory Activities Division, (202) 874-5090; Ronald Shimabukuro, 
Senior Attorney, Legislative and Regulatory Activities Division, (202) 
874-5090; or Roger Tufts, Senior Economic Advisor, Office of the Chief 
National Bank Examiner, (202) 874-5070; Office of the Comptroller of 
the Currency, 250 E Street, SW., Washington, DC 20219.
    Board: Roger Cole, Deputy Associate Director, (202) 452-2618; Norah 
Barger, Manager, (202) 452-2402; Robert Motyka, Supervisory Financial 
Analyst, (202) 452-3621; Division of Banking Supervision and 
Regulation; or Greg Baer, Managing Senior Counsel, Legal Division, 
(202) 452-3236; Board of Governors of the Federal Reserve System, 20th 
Street and Constitution Avenue, NW., Washington, DC 20551. For the 
hearing impaired only, Telecommunication Device for the Deaf, Dorothea 
Thompson, (202) 452-3544.
    FDIC: For supervisory purposes, Stephen G. Pfeifer, Examination 
Specialist, Accounting Section, Division of Supervision, (202) 898-
8904; for legal purposes, Dirck A. Hargraves, Attorney, Legal Division, 
(202) 898-7049; Federal Deposit Insurance Corporation, 550 17th Street, 
NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    In 1988, the central bank governors of the Group of Ten (G-10) 
countries endorsed a framework for international risk-based capital 
guidelines entitled ``International Convergence of Capital Measurement 
and Capital Standards'' (commonly referred to as the Basle 
Accord).1 Under the framework, risk-weighted assets are calculated 
by assigning assets and off-balance-sheet items to broad categories 
based primarily on their credit risk: that is, the risk that a banking 
organization will incur a loss due to an obligor or counterparty 
default on a transaction. Risk weights range from zero percent, for 
assets with minimal credit risk (such as U.S. Treasury securities), to 
100 percent, which is the risk weight that applies to most private 
sector claims, including commercial loans. In 1989, the Agencies 
adopted risk-based capital guidelines implementing the Basle Accord for 
the banking organizations they supervise.

    \1\ The Basle Accord was proposed by the Basle Committee, which 
comprises representatives of the central banks and supervisory 
authorities from the G-10 countries (Belgium, Canada, France, 
Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the 
United Kingdom, and the United States) and Luxembourg.
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    While the Basle Accord focuses primarily on credit risk, it also 
incorporates country transfer risk considerations. Transfer risk 
generally refers to the possibility that an asset cannot be serviced in 
the currency of payment because of a lack of, or restraints on, the 
availability of needed foreign exchange in the country of the obligor.
    In addressing transfer risk, the Basle Committee members examined 
several methods for assigning obligations of foreign countries to the 
various risk categories. Ultimately, the Basle Committee decided to use 
a defined group of countries considered to be of high credit standing 
as the basis for differentiating claims on foreign governments and 
banks. For this purpose, the Basle Committee determined this group to 
be the full members of the Organization for Economic Cooperation and 
Development (OECD), as well as countries that have concluded special 
lending arrangements with the International Monetary Fund (IMF) 
associated with the IMF's General Arrangements to Borrow.2 These 
countries, referred to in the Agencies' risk-based capital guidelines 
as the OECD-based group of countries, encompass most of the world's 
major industrial countries, including all members of the G-10 and the 
European Union.

    \2\ The OECD is an international organization of countries which 
are committed to market-oriented economic policies, including the 
promotion of private enterprise and free market prices; liberal 
trade policies; and the absence of exchange controls. Full members 
of the OECD at the time the Basle Accord was endorsed included 
Australia, Austria, Belgium, Canada, Denmark, Finland, France, 
Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, the 
Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, 
Switzerland, Turkey, the United Kingdom, and the United States. In 
May 1994, Mexico was accepted as a full member of the OECD. In 
addition, Saudi Arabia has concluded special lending arrangements 
associated with the IMF's General Arrangements to Borrow.
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    Under both the Basle Accord and the Agencies' risk-based capital 
guidelines, claims on the governments and banks of the OECD-based group 
of countries generally receive lower risk weights than corresponding 
claims on the governments and banks of non-OECD countries. 
Specifically, the Agencies' guidelines provide for the following 
treatment:
     Direct claims on, and the portions of claims that are 
directly and unconditionally guaranteed by, OECD-based central 
governments (including central banks) are assigned to the zero percent 
risk weight category. Corresponding claims on the central government of 
a country outside the OECD-based group are assigned to the zero percent 
risk weight category only to the extent that the claims are denominated 
in the local currency and the bank has local currency liabilities in 
that country.
     Claims conditionally guaranteed by OECD-based central 
governments and 

[[Page 66043]]
claims collateralized by securities issued or guaranteed by OECD-based 
central governments generally are assigned to the 20 percent risk 
weight category. The same types of claims on non-OECD countries are 
assigned to the 100 percent risk category.
     Long-term claims on non-OECD banks are assigned to the 100 
percent risk category, rather than to the 20 percent risk category 
accorded to long-term claims on OECD banks. (Short-term claims on all 
banks are assigned to the 20 percent risk weight category.)
     General obligation bonds that are obligations of states or 
other political subdivisions of the OECD-based group of countries are 
assigned to the 20 percent risk category. Revenue bonds of such 
political subdivisions are assigned to the 50 percent risk category. 
General obligation and revenue bonds of political subdivisions of non-
OECD countries are assigned to the 100 percent risk category.
    Recently, the OECD has taken steps to expand its membership. In 
light of these steps, the Basle Committee was urged to clarify an 
ambiguity in the Basle Accord as to whether the OECD members qualifying 
for the lower risk weights include only those members that were members 
of the OECD when the Basle Accord was endorsed in 1988, or all members, 
regardless of their date of entry into the OECD. The Basle Committee 
also reviewed the overall appropriateness of the criteria the Basle 
Accord uses to determine whether claims on a foreign government or bank 
qualify for placement in a lower risk category. As part of this review, 
the Basle Committee reassessed whether membership in the OECD (or the 
conclusion of special lending arrangements with the IMF) would, by 
itself, be sufficient to ensure that only countries with relatively low 
transfer risk would qualify for lower risk weight treatment.
    On July 15, 1994, the Basle Committee clarified that the reference 
in the Basle Accord to OECD members applies to all current members of 
the organization. The Basle Committee also stated its intention, 
subject to national consultation, to amend the definition of the OECD-
based group of countries in the Basle Accord in order to exclude from 
lower risk weight treatment any country within the OECD-based group of 
countries that had rescheduled its external sovereign debt within the 
previous five years. The Basle Committee adopted this change in the 
definition of the OECD-based group of countries on April 15, 1995.
    On October 14, 1994, the Board and the OCC published a joint notice 
of proposed rulemaking (59 FR 52100) to make corresponding changes in 
the definition of the OECD-based group of countries in their risk-based 
capital guidelines. The FDIC published a similar proposal on February 
15, 1995 (60 FR 8582). Under the Agencies' proposals, the OECD-based 
group of countries would continue to include countries that are full 
members of the OECD, regardless of entry date, as well as countries 
that have concluded special lending arrangements with the IMF 
associated with the IMF's General Arrangements to Borrow, but would 
exclude any country within this group that had rescheduled its external 
sovereign debt within the previous five years. The purpose of the 
proposed modification was to clarify that membership in the OECD-based 
group of countries must coincide with relatively low transfer risk in 
order for a country to qualify for the lower risk-weight treatment.
    Under the proposals, reschedulings of external sovereign debt 
generally would include renegotiations of terms arising from a 
country's inability or unwillingness to meet its external debt service 
obligations. The proposals further provided that renegotiations of debt 
in the normal course of business generally would not indicate transfer 
risk of the kind that would preclude an OECD-based country from 
qualifying for lower risk weight treatment.
    The Agencies invited comment on all aspects of the proposal.

II. Comments Received

    The OCC and the Board together received two public comments on 
their proposal. (The FDIC did not receive any comments.) One commenter 
was a regional banking organization that generally supported the 
proposal. The other was a clearinghouse that opposed the proposal.
    The banking organization agreed that OECD membership alone is not 
sufficient to ensure that only countries with relatively low transfer 
risk qualify for lower risk weight treatment, and it supported the 
additional criterion as providing a good indication of a higher level 
of transfer risk. The banking organization suggested that the 
definition should be further revised to exclude newly-formed countries, 
whose willingness and ability to meet their debt obligations were 
unproven, for a period of five years. The Agencies did not adopt this 
suggestion, because the process of admitting countries to the OECD is 
lengthy enough that the five-year waiting period recommended by the 
commenter would have little practical effect.
    The clearinghouse viewed the current criteria as adequate and 
commented that adding another criterion would increase the complexity 
of and confusion about the risk-based capital guidelines. Although the 
Agencies agree with the commenter on the need to minimize the 
complexity of the risk-based capital guidelines, the Agencies do not 
believe that this rule will increase their complexity significantly, 
particularly since reschedulings by OECD countries tend to be extremely 
rare. Until a rescheduling occurs, the change in the definition will 
not have any effect on the assignment of assets to risk-weight 
categories, and thus will have little or no effect on banks.

III. Final Rule

    After carefully considering the comments received and deliberating 
further on the issues involved, the Agencies are adopting a final rule 
that amends the definition of the OECD-based group of countries in 
their risk-based capital guidelines substantially as proposed.
    Under the final rule, the OECD-based group of countries continues 
to include countries that are full members of the OECD, regardless of 
entry date, as well as countries that have concluded special lending 
arrangements with the IMF associated with the IMF's General 
Arrangements to Borrow, but excludes any country within this group that 
has rescheduled its external sovereign debt within the previous five 
years.
    For purposes of this final rule, an event of rescheduling of 
external sovereign debt generally would include renegotiations of terms 
arising from a country's inability or unwillingness to meet its 
external debt service obligations. Renegotiations of debt in the normal 
course of business generally do not indicate transfer risk of the kind 
that would preclude an OECD-based country from qualifying for lower 
risk weight treatment. One example of such a routine renegotiation 
would be a renegotiation to allow the borrower to take advantage of a 
change in market conditions, such as a decline in interest rates.
    This distinction between renegotiations arising from a country's 
inability or unwillingness to meet its external debt service 
obligations and renegotiations that reflect a change in market 
conditions was discussed in the preambles of the Agencies' notices of 
proposed rulemaking but was not included in the regulatory text. In 
order to clarify the meaning of the final rule, the Agencies are 
including language to this effect in the text of the final rule. 

[[Page 66044]]


IV. Regulatory Flexibility Act Analysis

    The Agencies hereby certify that this final rule will not have a 
significant economic impact on a substantial number of small business 
entities (in this case, small banking organizations), in accord with 
the spirit and purposes of the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.). The impact on institutions regulated by the Agencies, 
regardless of their size, will be minimal. In addition, because the 
risk-based capital guidelines generally do not apply to bank holding 
companies with consolidated assets of less than $150 million, this 
proposal will not affect such companies. Accordingly, no regulatory 
flexibility analysis is required.

V. Paperwork Reduction Act and Regulatory Burden

    The Agencies have determined that this final rule will not increase 
the regulatory paperwork burden of banking organizations pursuant to 
the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (Pub. L. 103-325, 108 Stat. 2160) provides that 
the Agencies must consider the administrative burdens and benefits of 
any new regulations that impose additional requirements on insured 
depository institutions. Section 302 also requires such a rule to take 
effect on the first day of the calendar quarter following final 
publication of the rule, unless the agency, for good cause, determines 
an earlier effective date is appropriate. This final rule is effective 
on April 1, 1996.

VI. OCC Statement on Executive Order 12866

    The OCC has determined that this final rule is not a significant 
regulatory action, as that term is defined by Executive Order 12866.

VII. OCC Statement on Unfunded Mandates Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995, Pub. L. 
104-4 (Unfunded Mandates Act), signed into law on March 22, 1995, 
requires that an agency prepare a budgetary impact statement before 
promulgating a rule that includes a Federal mandate that may result in 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100 million or more in any one year. If a 
budgetary impact statement is required, section 205 of the Unfunded 
Mandates Act also requires an agency to identify and consider a 
reasonable number of regulatory alternatives before promulgating a 
rule. The OCC has determined that this final rule will not result in 
expenditures by State, local, and tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, the OCC 
has not prepared a budgetary impact statement or specifically addressed 
the regulatory alternatives considered.

List of Subjects

12 CFR Part 3

    Administrative practice and procedure, Capital, National banks, 
Reporting and recordkeeping requirements, Risk.

12 CFR Part 208

    Accounting, Agriculture, Banks, banking, Confidential business 
information, Crime, Currency, Federal Reserve System, Flood insurance, 
Mortgages, Reporting and recordkeeping requirements, Securities.

12 CFR Part 225

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Securities.

12 CFR Part 325

    Bank deposit insurance, Banks, banking, Capital adequacy, Reporting 
and recordkeeping requirements, Savings associations, State nonmember 
banks.

Authority and Issuance

OFFICE OF THE COMPTROLLER OF THE CURRENCY

12 CFR CHAPTER I

    For the reasons set out in the joint preamble, Appendix A to part 3 
of title 12, chapter I of the Code of Federal Regulations is amended as 
set forth below.

PART 3--MINIMUM CAPITAL RATIOS; ISSUANCE OF DIRECTIVES

    1. The authority citation for part 3 continues to read as follows:

    Authority: 12 U.S.C. 93a, 161, 1818, 1828(n), 1831n note, 1835, 
3907, and 3909.

    2. In section 1 of appendix A to part 3, footnote 1 in paragraph 
(c)(19) is redesignated as footnote 1a.
    3. In section 1 of appendix A to part 3, paragraph (c)(16) is 
revised to read as follows:

Appendix A to Part 3--Risk-Based Capital Guidelines

Section 1. Purpose, Applicability of Guidelines, and Definitions.

* * * * * *
    (c) * * *
    (16) The OECD-based group of countries comprises all full 
members of the Organization for Economic Cooperation and Development 
(OECD) regardless of entry date, as well as countries that have 
concluded special lending arrangements with the International 
Monetary Fund (IMF) associated with the IMF's General Arrangements 
to Borrow,1 but excludes any country that has rescheduled its 
external sovereign debt within the previous five years. These 
countries are hereinafter referred to as OECD countries. A 
rescheduling of external sovereign debt generally would include any 
renegotiation of terms arising from a country's inability or 
unwillingness to meet its external debt service obligations, but 
generally would not include renegotiations of debt in the normal 
course of business, such as a renegotiation to allow the borrower to 
take advantage of a decline in interest rates or other change in 
market conditions.

     1 As of November 1995, the OECD included the following 
countries: Australia, Austria, Belgium, Canada, Denmark, Finland, 
France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, 
Mexico, the Netherlands, New Zealand, Norway, Portugal, Spain, 
Sweden, Switzerland, Turkey, the United Kingdom, and the United 
States; and Saudi Arabia had concluded special lending arrangements 
with the IMF associated with the IMF's General Arrangements to 
Borrow.
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* * * * *
    Dated: August 28, 1995.
Eugene A. Ludwig,
Comptroller of the Currency.

FEDERAL RESERVE SYSTEM

12 CFR CHAPTER II

    For the reasons set forth in the joint preamble, the Board of 
Governors of the Federal Reserve System amends 12 CFR parts 208 and 225 
as set forth below:

PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL 
RESERVE SYSTEM (REGULATION H)

    1. The authority citation for part 208 continues to read as 
follows:

    Authority: 12 U.S.C. 36, 248(a), 248(c), 321-338a, 371d, 461, 
481-486, 601, 611, 1814, 1823(j), 1828(o), 1831o, 1831p-1, 3105, 
3310, 3331-3351, and 3906-3909; 15 U.S.C. 78b, 78l(b), 78l(g), 
78l(i), 78o-4(c)(5), 78q, 78q-1, and 78w; 31 U.S.C. 5318; 42 U.S.C. 
4102a, 4104a, 4104b, 4106, 4128.

    2. Appendix A to part 208 is amended by revising footnote 22 in 
section III.B.1. to read as follows:

Appendix A to Part 208--Capital Adequacy Guidelines for State Member 
Banks: Risk-Based Measure

* * * * *
    III. * * *
    B. * * *
    1. * * * \22\* * *
* * * * *
    \22\The OECD-based group of countries comprises all full members 
of the 

[[Page 66045]]
Organization for Economic Cooperation and Development (OECD) regardless 
of entry date, as well as countries that have concluded special 
lending arrangements with the International Monetary Fund (IMF) 
associated with the IMF's General Arrangements to Borrow, but 
excludes any country that has rescheduled its external sovereign 
debt within the previous five years. As of November 1995, the OECD 
included the following countries: Australia, Austria, Belgium, 
Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, 
Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, 
Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United 
Kingdom, and the United States; and Saudi Arabia had concluded 
special lending arrangements with the IMF associated with the IMF's 
General Arrangements to Borrow. A rescheduling of external sovereign 
debt generally would include any renegotiation of terms arising from 
a country's inability or unwillingness to meet its external debt 
service obligations, but generally would not include renegotiations 
of debt in the normal course of business, such as a renegotiation to 
allow the borrower to take advantage of a decline in interest rates 
or other change in market conditions.
* * * * *

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

    1. The authority citation for part 225 continues to read as 
follows:

    Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 
1843(c)(8), 1844(b), 1927(l), 3106, 3108, 3310, 3331-3351, 3907, and 
3909.

    2. Appendix A to part 225 is amended by revising footnote 25 in 
section III.B.1. to read as follows:

Appendix A to Part 225--Capital Adequacy Guidelines for Bank Holding 
Companies: Risk-Based Measure

    III. * * *
    B. * * *
    1. * * * \25\ * * *
* * * * *
    \25\The OECD-based group of countries comprises all full members 
of the Organization for Economic Cooperation and Development (OECD) 
regardless of entry date, as well as countries that have concluded 
special lending arrangements with the International Monetary Fund 
(IMF) associated with the IMF's General Arrangements to Borrow, but 
excludes any country that has rescheduled its external sovereign 
debt within the previous five years. As of November 1995, the OECD 
included the following countries: Australia, Austria, Belgium, 
Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, 
Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, 
Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United 
Kingdom, and the United States; and Saudi Arabia had concluded 
special lending arrangements with the IMF associated with the IMF's 
General Arrangements to Borrow. A rescheduling of external sovereign 
debt generally would include any renegotiation of terms arising from 
a country's inability or unwillingness to meet its external debt 
service obligations, but generally would not include renegotiations 
of debt in the normal course of business, such as a renegotiation to 
allow the borrower to take advantage of a decline in interest rates 
or other change in market conditions.
* * * * *
    By the order of the Board of Governors of the Federal Reserve 
System, November 13, 1995.
William W. Wiles,
Secretary of the Board.

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR CHAPTER III

    For the reasons set forth in the joint preamble, the Board of 
Directors of the Federal Deposit Insurance Corporation amends part 325 
of title 12 of the Code of Federal Regulations as follows:

PART 325--CAPITAL MAINTENANCE

    1. The authority citation for part 325 continues to read as 
follows:

    Authority: 12 U.S.C. 1815(a), 1815(b), 1816, 1818(a), 1818(b), 
1818(c), 1818(t), 1819(tenth), 1828(c), 1828(d), 1828(i), 1828(n), 
1828(o), 1831o, 1835, 3907, 3909, 4808; Pub. L. 102-233, 105 Stat. 
1761, 1789, 1790 (12 U.S.C. 1831n note); Pub. L. 102-242, 105 Stat. 
2236, 2355, 2386 (12 U.S.C. 1828 note).

    2. Appendix A to part 325 is amended by revising footnote 12 in 
section II.B.2. to read as follows:

Appendix A to Part 325--Statement of Policy on Risk-Based Capital

* * * * *
    II. * * *
    B. * * *
    2. * * *12 * * *
* * * * *
    12 The OECD-based group of countries comprises all full 
members of the Organization for Economic Cooperation and Development 
(OECD) regardless of entry date, as well as countries that have 
concluded special lending arrangements with the International 
Monetary Fund (IMF) associated with the IMF's General Arrangements 
to Borrow, but excludes any country that has rescheduled its 
external sovereign debt within the previous five years. As of 
November 1995, the OECD included the following countries: Australia, 
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, 
Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, 
New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, 
the United Kingdom, and the United States; and Saudi Arabia had 
concluded special lending arrangements with the IMF associated with 
the IMF's General Arrangements to Borrow. A rescheduling of external 
sovereign debt generally would include any renegotiation of terms 
arising from a country's inability or unwillingness to meet its 
external debt service obligations, but generally would not include 
renegotiations of debt in the normal course of business, such as a 
renegotiation to allow the borrower to take advantage of a decline 
in interest rates or other change in market conditions.
* * * * *
    By order of the Board of Directors.

    Dated at Washington, D.C. this 26th day of October, 1995.

Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 95-30664 Filed 12-19-95; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P