Regulatory Issues and Alternatives
The current regulatory treatment of foreign banks in the United States is a patchwork of overlapping jurisdiction in limited areas, juxtaposed against a wide gap at the federal level. Regulation of foreign banking in the United States has developed at an uneven pace, largely as a reaction to a problem situation. The general philosophy in the United States is that banking is sacrosanct, and must be protected (even against itself). Where Britain and the European Continent use suasion, America has substituted statute. In the sections which follow we describe the existing system of regulation, consider the problems perceived in the present regulatory treatment, analyse recent proposals to modify the regulation of foreign banks, and consider possible directions of approach.
KeywordsMonetary Policy Federal Reserve Foreign Bank Reserve Requirement International Banking
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