[Federal Register Volume 61, Number 212 (Thursday, October 31, 1996)]
[Notices]
[Pages 56263-56265]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27969]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

Federal Reserve System

Federal Deposit Insurance Corporation


Submission for OMB Review; 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: Notice of information collection to be submitted to OMB for 
review and approval under the Paperwork Reduction Act of 1995.

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SUMMARY: On February 21, 1995, the OCC, the Board, and the FDIC (the 
``agencies'') requested approval from the U.S. Office of Management and 
Budget (OMB) and published for a 30-day public comment proposed 
revisions to the Country Exposure Report. In response to public request 
the comment period was extended to April 21, 1995. The agencies 
received comments from one trade group and one commercial bank. After 
considering the comments, the Federal Financial Institutions 
Examination Council (FFIEC), of which the agencies are members, has 
adopted several modifications to the revised reporting requirements 
initially proposed.
    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 may 
not conduct or sponsor, and the respondent is not required to respond 
to, an information collection that has been extended, revised, or 
implemented on or after October 1, 1995, unless it displays a currently 
valid Office of Management and Budget (OMB) control number. Comments 
are invited on: (a) whether the proposed revisions to the following 
collections of information are necessary for the proper performance of 
the agencies' functions, including whether the information has 
practical utility; (b) the accuracy of the agencies' estimate of the 
burden of the information collections as they are proposed to be 
revised, including the validity of the

[[Page 56264]]

methodology and assumptions used; (c) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (d) ways 
to minimize the burden of information collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.

DATES: Comments must be submitted on or before December 2, 1996.

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(s), will be shared among the agencies.
    OCC: Written comments should be submitted to the Communications 
Division, Ninth Floor, Office of the Comptroller of the Currency, 250 E 
Street, S.W., Washington, D.C. 20219; Attention: Paperwork Docket No. 
1557-0100 [FAX number (202) 874-5274; Internet address: 
[email protected]]. Comments will be available for inspection 
and photocopying at that address.
    Board: Written comments should be addressed to Mr. William W. 
Wiles, Secretary, Board of Governors of the Federal Reserve System, 
20th and C Streets, N.W., Washington, D.C. 20551, or delivered to the 
Board's mail room between 8:45 a.m. and 5:15 p.m., and to the security 
control room outside of those hours. Both the mail room and the 
security control room are accessible from the courtyard entrance on 
20th Street between Constitution Avenue and C Street, N.W. Comments 
received may be inspected in room M-P-500 between 9:00 a.m. and 5:00 
p.m., except as provided in section 261.8 of the Board's Rules 
Regarding Availability of Information, 12 CFR 261.8(a).
    FDIC: Written comments should be addressed to the Office of the 
Executive Secretary, Federal Deposit Insurance Corporation, 550 17th 
Street, N.W., Washington, D.C. 20429. Comments may be hand-delivered to 
Room F-402, 1776 F Street, N.W., Washington, D.C. 20429, on business 
days between 8:30 a.m. and 5:00 p.m. Comments may be sent through 
facsimile to: (202) 898-3838 or by the Internet to: [email protected]. 
Comments will be available for inspection at the FDIC Public 
Information Center, Room 100, 801 17th Street, N.W., Washington, D.C., 
between 9:00 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: Alexander Hunt, Office of Information and 
Regulatory Affairs, Office of Management and Budget, New Executive 
Office Building, Room 3208, Washington, D.C. 20503.

FOR FURTHER INFORMATION CONTACT: A copy of the revised collection of 
information may be requested from any of the agency clearance officers 
whose names appear below.
    OCC: Jessie Gates, OCC Clearance Officer, (202) 874-5090, Office of 
the Comptroller of the Currency, 250 E Street, SW., Washington, DC 
20219.
    Board: Mary M. McLaughlin, 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 only, Dorothea 
Thompson, (202) 452-3544, Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW., Washington, DC 20551.
    FDIC: Steven F. Hanft, FDIC Clearance Officer, (202) 898-3907, 
Office of the Executive Secretary, Federal Deposit Insurance 
Corporation, 550 17th Street NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: Request for OMB approval to extend, with 
revision, the following currently approved collection of information:

1. Report Title: Country Exposure Report/Country Exposure Information 
Report
Form Number: FFIEC 009 and FFIEC 009a
Frequency of Response: Quarterly.
Affected Public: Business or other for profit.
For OCC:
    OMB Number: 1557-0100.
    Number of Respondents: 60 (FFIEC 009); 60 (FFIEC 009a)
    Total Annual Responses: 480
    Estimated Time per Response: 30 burden hours (FFIEC 009); 5.25 
burden hours (FFIEC 009a)
    Total Annual Burden: 8,460 burden hours.
For Board:
    OMB Number: 7100-0035.
    Number of Respondents: 34 (FFIEC 009); 34 (FFIEC 009a)
    Total Annual Responses: 272
    Estimated Time per Response: 30 burden hours (FFIEC 009); 5.25 
burden hours (FFIEC 009a)
    Total Annual Burden: 4,794 burden hours.
For FDIC:
    OMB Number: 3064-0017.
    Number of Respondents: 40 (FFIEC 009); 40 (FFIEC 009a)
    Total Annual Responses: 320
    Estimated Time per Response: 30 burden hours (FFIEC 009); 5.25 
burden hours (FFIEC 009a)
    Total Annual Burden: 5,640 burden hours.

    General Description of Report: This information collection is 
mandatory: 12 U.S.C. 161 (for national banks), 12 U.S.C. 248(a), 
1844(c), and 3906 (for state member banks), and 12 U.S.C. 1817 and 1820 
(for insured state nonmember commercial and savings banks). The FFIEC 
009 is given confidential treatment (5 U.S.C. 552 (b)(4) and (b)(8)). 
Small businesses (that is, small banks) are not affected.
    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 one 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. Reporting institutions must also furnish a list 
of countries in which they have lending exposures above .75 percent of 
total assets or 15 percent of total capital, whichever is less.
    Current Actions: Revisions initially proposed for the FFIEC 009 
consisted of: the addition of two new items, ``Revaluation Gains on 
Off-Balance-Sheet Items'' and ``Securities Held in Trading Accounts;'' 
the deletion of the item ``Amount of Claims that Represent Guarantees 
Issued by the U.S. Government and its Agencies;'' the combination of 
three items ``Commercial Letters of Credit,'' ``Standby Letters of 
Credit and Risk Participations Purchased,'' and ``All other 
Commitments'' into one item ``All Commitments;'' the redefinition of 
the item ``Trade Financing'' to include ``commercial letters of 
credit;'' and the revision of the reporting instructions to require all 
claims consisting of available-for-sale securities to be reported at 
amortized cost rather than at fair value, as well as other minor 
instructional clarifications. After considering the comments, the 
regulatory agencies made several modifications to the initial proposed 
changes. Changes and comments are discussed below.
    Type of Review: Revision.

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    Commenters generally supported the revisions proposed by the 
regulatory agencies but also suggested additional changes to the report 
in order to deal with new financial and economic realities and to 
recognize recent approaches and arrangements undertaken by banks to 
manage and reduce country exposure. After considering the comments, the 
FFIEC has approved a revised Country Exposure Report (FFIEC 009) and a 
revised Country Exposure Information Report (FFIEC 009a) for 
implementation as of the March 31, 1997, report date.
    The revised FFIEC 009 report consists of two schedules: schedule 1, 
which collects information on the respondent's country exposure 
excluding claims resulting from foreign exchange and derivative 
products; and schedule 2, which collects information on the 
respondent's country exposure resulting from revaluation gains on 
foreign exchange and derivative contracts held in the trading account. 
Schedule 1 is substantially the same as the revised report as 
originally proposed, except that the proposed memorandum column for 
``Revaluation Gains on Off-Balance Sheet Items,'' in essence, moved to 
Schedule 2. In addition, columns for the breakdown of time remaining to 
maturity for total claims on foreign residents for ``Over One Year to 
Two Years'' and ``Over Two Years to Five Years'' have been combined 
into a single column for ``Over One Year to Five Years,'' and the 
proposed column for ``Securities Held in Trading Accounts'' has been 
redefined as ``Assets Held for Trading.'' Schedule 2 was developed as 
the result of a recommendation from commenters that mark-to-market 
gains on foreign exchange and derivative contracts should be reported 
on a new, separate schedule.
    Revisions to the FFEIC 009a report reflect the inclusion of a 
country's exposure resulting from revaluation gains on derivative 
products. A new column has been added to collect the ``Amount of Cross-
border Claims Outstanding from Derivative Products after Mandated 
Adjustments for Transfer of Exposure and Amount of Net Local Country 
Claims from Derivative Products.''
    The specific comments received and how they were addressed by the 
regulatory agencies follow:
    1. The commenters agreed with the regulatory agencies that 
information on revaluation gains on foreign exchange and derivative 
contracts should be included in the report, but recommended that the 
agencies collect this information on a separate schedule. Commenters 
noted that since the Financial Accounting Standards Board (FASB) 
Interpretation No. 39 provides for netting exposure to a counterparty 
resulting from revaluation gains and losses, regardless of currency or 
maturity, and use of the current schedule would not be feasible for 
this purpose. Working closely with representatives of the major banks 
that are primarily affected by this reporting change, the regulatory 
agencies developed a new schedule for foreign exchange and derivative 
contracts. The information that is collected on the FFIEC 009, Schedule 
2, will distinguish the portion of an institution's gross exposure that 
is comprised of on-balance sheet revaluation gains from the remainder 
of its on-balance sheet exposure which consists of funds the 
institution has actually disbursed. This schedule is required to be 
completed only by banks which report total gross notional derivative 
contracts held for trading in excess of 10 billion dollars, or gross 
fair values of derivative contracts held for trading in an amount 
greater than 5 percent of their total assets.
    2. The commenters noted that the requirement for reporting 
revaluation gains by remaining maturity, which was proposed in the 
original FFIEC 009 form, is not information that is maintained or 
readily available and would exacerbate reporting burdens for U.S. 
banking organizations. Therefore the agencies removed the requirement 
of reporting remaining maturities of these gains in the revised form.
    3. The commenters suggested expanding the definition of ``local 
currency claims and liabilities'' to include local funding in either a 
local or non-local currency. The commenters' view is that claims of a 
branch or a subsidiary of a U.S. bank in a foreign country on a 
resident of that country should not be regarded as involving country 
exposure when the claim is funded in that country, irrespective of 
whether the claim is denominated in the local currency or in a non-
local currency. The regulatory agencies concur with this view and are 
aware that the need for this approach becomes particularly important as 
non-local currencies increasingly become an important element of local 
monetary systems. The commenters also suggested that claims funded by 
nonresidents that expressly assume transfer risk should be excluded 
from local country calculations. The agencies have revised the 
instructions to incorporate this suggestion. In the revised reports, 
local currency claims and local currency liabilities have been 
redefined as local country claims and local country liabilities where 
local country liabilities may be to residents or nonresidents of the 
local country, but which represent the legal obligations only of the 
local office and for which no payment is guaranteed at locations 
outside the country of that office.
    4. For the purpose of minimizing reporting burden, commenters 
suggested: (a) Excluding from the reports revaluation gains and losses 
on derivatives and foreign exchange contracts entered into with 
counterparties in G-10 countries, on the grounds that transfer risk in 
these countries is considered to be extremely low; and (b) exempting 
reporting of exposure that is not significant to the reporting 
institution. Information collected in this report is used to assess 
exposures to possible sources of credit risk, as well as transfer risk, 
and exposures in G-10 countries may be relevant to this purpose. The 
report is also used to develop aggregate international debt data. 
Exposures that may be small relative to individual institutions may be 
significant in the aggregate. These suggestions for burden reduction 
were therefore not adopted.
    Commenters also suggested reporting exposures only after the 
application of arrangements that transfer country exposure to the 
country of the ultimate obligor. The requirement that exposures are 
reported gross of collateral and other arrangements for transferring 
risk was retained in schedule 1 because such information may be 
important in analyzing risks inherent in particular situations. 
Exposures arising from foreign exchange and derivative products are 
generally reported in schedule 2, however, only in the country of the 
ultimate obligor, except in certain circumstances where possible 
residual transfer risk may remain in, for example, the country where a 
branch office is located. Such exposures are reported in these cases as 
a memorandum item.

    Dated: October 22, 1996.
Karen Solomon,
Director, Legislative and Regulatory Activities Division, Office of the 
Comptroller of the Currency.

    Board of Governors of the Federal Reserve System, October 25, 
1996.

William W. Wiles,
Secretary of the Board.

    Dated at Washington, DC, this 23rd day of October, 1996.
Federal Deposit Insurance Corporation
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-27969 Filed 10-30-96; 8:45 am]
BILLING CODE 4810-33-P, 6210-01-P, 6714-01-P