US

The Federal Reserve Board issues its final rule on foreign banking organisations becoming financial holding companies

Douglas P. Faucette, Muldoon Murphy & Faucette LLP. (Assisted by Roy E. Brownell II)

Introduction

The Federal Reserve Board (“FRB”) recently approved a final rule setting out the procedures for domestic bank holding companies (“BHCs”) and foreign banking organisations to qualify as financial holding companies (“FHCs”) under the Gramm-Leach-Bliley Act (“GLB Act”).The final rule, which went into effect in January 2001, was notable mostly for its impact on foreign banks. This article will discuss some of the criticism the interim rule received, the ramifications of the final rule and its impact on foreign banking organisations that wish to take advantage of expanded FHC powers.