[Federal Register Volume 70, Number 74 (Tuesday, April 19, 2005)]
[Notices]
[Pages 20414-20417]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7762]


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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.

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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

[[Page 20415]]

(OMB) control number. On August 17, 2004, the agencies requested public 
comment for 60 days on proposed revisions to the Country Exposure 
Report (FFIEC 009) and the Country Exposure Information Report (FFIEC 
009a) (August proposal), which are currently approved information 
collections. After considering the comments received, the Federal 
Financial Institutions Examination Council (FFIEC), of which the 
agencies are members, has modified the August proposal and is 
requesting public comment on the modified set of proposed revisions.

DATES: Comments must be submitted on or before June 20, 2005.

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 [email protected]. 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: [email protected]. 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.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected].
     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 
[email protected].

FOR FURTHER INFORMATION CONTACT: Additional information or a copy of 
the collection may be requested from:
    OCC: Mary Gottlieb, 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: Michelle Long, 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.

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: 70 burden hours (FFIEC 009), 
5.25 burden hours (FFIEC 009a).
    Estimated Total Annual Burden: 5,880 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: 70 burden hours (FFIEC 009), 
5.25 burden hours (FFIEC 009a).
    Estimated Total Annual Burden: 8,680 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: 70 burden hours (FFIEC 009), 
5.25 burden hours (FFIEC 009a).
    Estimated Total Annual Burden: 6,160 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 banks). The FFIEC 009 data are given confidential 
treatment (5 U.S.C. 552(b)(4) and (b)(8)). The FFIEC 009a data are 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

[[Page 20416]]

(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

    On August 17, 2004, the OCC, the Board, and the FDIC jointly 
published a notice soliciting comments for 60 days on proposed 
revisions to the FFIEC 009 and FFIEC 009a (69 FR 51145). The agencies 
proposed to revise the FFIEC 009 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 included the collection of 
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 
August proposal, the definition of public (i.e., government) sector was 
to be brought into agreement with the definition used in the 
Consolidated Reports of Condition and Income (Call Report) (FFIEC 031 
and 041) filed by banks. No changes to the FFIEC 009a were proposed, 
although the change in the definition of public sector in the FFIEC 009 
called for a change in the amounts reported in columns 6 and 7 of the 
FFIEC 009a by corresponding amounts. The FFIEC 009a instructions were 
to be changed, however, to reflect column changes on the FFIEC 009. In 
addition, comments were requested on the way claims are adjusted for 
collateral and guarantees and on the reporting of the potential future 
exposure of derivative contracts.
    In response to the August 17, 2004, notice, the agencies received 
two substantively similar comment letters from a banking trade 
association and a bank holding company. To clarify the comments 
received, the agencies met with the commenters and a few large 
financial institution members of the trade association. The FFIEC and 
the agencies have considered the comments received from the commenters 
and during the meeting with the financial institutions. Due to the 
substantive nature of the comments and subsequent revisions to the 
proposal, the FFIEC and the agencies have decided to request public 
comment again. The agencies propose to implement changes to the FFIEC 
009 effective with the September 30, 2005, report date, as discussed 
below.

Detailed Discussion of the Comments and Modifications to the August 
Proposal

Foreign-Office Claims on Local Residents Denominated in a Non-Local 
Currency

    The commenters suggested removing foreign-office claims on local 
residents that are denominated in a non-local currency from columns 1-
3, and placing this information in a separate column. (This would make 
columns 1-3 exclusively cross-border claims.) They were concerned that 
combining a portion of foreign-office claims on local residents with 
cross-border claims might mislead data users. In general, the agencies 
concurred with this suggestion and agreed to add three additional 
columns to collect, by sector, foreign-office claims on local residents 
in a non-local currency (rather than adding only one column to collect 
total foreign-office claims on local residents in a non-local 
currency). This revision would help prevent misinterpretation of the 
data while maintaining compliance with the BIS Guidelines for their 
consolidated banking statistics. During the meeting with commenters and 
financial institutions, the majority of institutions stated that they 
currently have this information in their systems and all institutions 
felt that the burden of having three extra columns, rather than just 
one extra column, would be small.

Foreign-Office Commitments to and Guarantees on Foreign Residents

    The commenters disagreed with including commitments to and 
guarantees on local residents made by foreign offices with cross-border 
commitments and guarantees (proposed columns 17 and 18). They suggested 
that the agencies should collect only cross-border commitments to and 
guarantees on foreign residents. The agencies declined to take this 
suggestion. By collecting both cross-border and foreign office 
commitments and guarantees, the FFIEC 009 reporting form would be in 
compliance with the BIS Guidelines for ultimate risk data and the data 
would provide more comprehensive information about commitments and 
guarantees than is currently collected on the reporting form. Moreover, 
the burden associated with proposed columns 17 and 18 would be small. 
The agencies did agree that when publishing the aggregate data, they 
will make clear that these columns include both cross-border and 
foreign-office business.
    One commenter suggested combining commitments and guarantees, or at 
least redefining ``commitments'' as ``commitments plus guarantees, 
excluding credit derivatives,'' and redefining ``guarantees'' as 
``protection sold via credit derivatives'' (proposed columns 17 and 
18). The agencies declined to take this suggestion in order to achieve 
compliance with the BIS Guidelines and to keep information about 
commitments and guarantees separate. However, the agencies agreed to 
clarify the distinction between commitments and guarantees in the 
instructions for the FFIEC 009.

Sector Reporting

    The commenters stated that decreasing the sector splits for inward 
and outward risk transfers from three columns on the current reporting 
form (banks, public, and other; columns 8-10 and 11-13) to two columns 
(banks and non-banks; proposed columns 6-7 and 8-9) would increase 
burden. Although reporters would still have to maintain all the 
underlying data, the revision would increase programming costs and 
could be confusing for the respondents. Therefore, the commenters 
suggested removing the collection of data on inward and outward risk 
transfers (columns 6-9) and, in its place, calculating net (rather than 
gross) risk transfers. The agencies agreed to revise the proposal to 
collect three sector breaks for inward and outward risk transfers, as 
in the current reporting form. This would leave U.S. data in line with 
the BIS Guidelines, provide additional useful information, and reduce 
burden in comparison to the original proposal.
    One commenter stated that sector splits for foreign office claims 
on local residents that are denominated in local currency (a component 
of proposed columns 13-15) are not relevant for country risk. The 
agencies declined to take this suggestion to ensure that the FFIEC 009 
will be consistent with the BIS Guidelines for ultimate risk data. 
Moreover, this definition is consistent with the fairly broad 
definition of country risk that banking supervisors now use.

Resale Agreements

    The commenters suggested revising the instructions regarding risk 
redistributions for resale agreements. The agencies concurred with this 
comment and agreed to change the instructions to allocate resale 
agreements on an ultimate risk basis

[[Page 20417]]

according to the country of the ultimate counterparty (i.e., to the 
country of the parent bank in the case of a bank branch counterparty 
and to the country of any other entity providing an explicit guarantee 
on the transaction) without regard to the country of the collateral. 
This change would reduce burden and be more consistent with the 
internal risk practices of many, if not most, internationally active 
institutions.

Repayment Structures

    The commenters suggested, and the agencies concurred with, changing 
the risk redistributions with regard to the treatment of repayment 
structures. The agencies agreed to note in the instructions that 
reporters can contact their supervisory agency to discuss whether 
individual structures qualify for redistribution in columns 6 through 
9.

Collection of Data on Foreign-Office Liabilities by Country of 
Creditor's Residence

    The commenters strongly supported the addition of a column to 
collect foreign-office liabilities by country of residence of the 
creditor, facilitating a reduction in the number of submissions of the 
Quarterly Report of Assets and Liabilities of Large Foreign Offices of 
U.S. Banks (FR 2502q) to the Federal Reserve. The agencies agreed to 
add the column; the collection of this data would not begin until the 
reduction in reporting is implemented on the FR 2502q and would be 
required only from institutions that otherwise would have had to file 
the FR 2502q. The commenters also suggested possibly further revising 
the FFIEC 009 (i.e., by incorporating offshore financial centers) to 
allow the elimination of the FR 2502q. The agencies are currently 
investigating this possibility.

Potential Future Credit Exposures of Derivative Contracts

    The commenters suggested leaving unchanged the reporting of 
derivatives on the FFIEC 009 reporting form because it is all on an 
ultimate risk basis (i.e., use a current mark-to-market calculation 
after application of Financial Accounting Standards Board 
Interpretation No. 39 and do not collect potential future exposures 
(PFEs) of derivative contracts). The agencies decided, however, to add 
a column to Schedule 2 to collect the total credit equivalent amount, 
following the U.S. risk-based capital standards, for all foreign 
exchange and derivative contracts by country of ultimate counterparty. 
Banks compute the credit equivalent amounts for risk-based capital 
purposes, and these data are deemed to be a better measure of 
counterparty exposure arising from derivative contracts than market 
value alone.

Reporting Burden

    The commenters stated that reporting burden is actually higher than 
the agencies' current estimate of an average of 30 hours. One commenter 
estimated reporting burden of 60 to 1,000 hours. Most of the reporting 
burden comes from compiling the underlying data. Banks with a large 
number of foreign offices, each of which needs to compile and validate 
its data before sending these data to the parent, have significantly 
higher burden. One of the most burdensome tasks is reallocating risk to 
determine ultimate-risk claims. Given the same amount of underlying 
data, changes in the actual number of cells they report on a form 
changes burden relatively little. The agencies agreed to increase the 
estimated response time for the FFIEC 009 to an average of 70 hours. 
This average takes into consideration smaller institutions with only 
one foreign office and more complex institutions with many foreign 
offices.

Delay Implementation

    The commenters suggested delaying the implementation of the FFIEC 
009 revisions until September 2005 or later and not before other 
participating countries implement corresponding changes to their 
collections of data on banks' cross-border exposures. The agencies 
agreed to delay the implementation of the revisions until September 
2005. At that time, the United States will be the last G-10 country to 
implement the enhancements to the BIS consolidated banking statistics.

Extend Filing Period

    During the meeting with commenters and financial institutions, it 
was suggested that the agencies allow a 60-day filing period for the 
first few quarters that the banks file the revised reporting form. The 
agencies agreed to extend the filing period to 60 days for the initial 
revised report in September 2005.

Delete Some Memoranda Items

    During the meeting with commenters and financial institutions, it 
was suggested that the agencies consider deleting one or more memoranda 
items. Since the information reported in each memorandum item is 
considered very useful, the agencies decided to retain all memoranda 
items. In addition, to improve the usefulness of these items, the 
definition of trade financing will be revised.

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, 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: April 12, 2005.
Stuart Feldstein,
Assistant Director, Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency.

    Board of Governors of the Federal Reserve System, April 13, 
2005.
Jennifer J. Johnson,
Secretary of the Board.

    Dated in Washington, DC, this 12th day of April, 2005.

    Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 05-7762 Filed 4-18-05; 8:45 am]
BILLING CODE 4810-33-P 6210-01-P 6714-01-P