FFIEC002_FFIEC002S_20090410_omb

Supporting Statement for the
Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002; OMB No. 7100-0032)
and the Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or
Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.) Bank
(FFIEC 002S; OMB No. 7100-0032)
Summary
The Board of Governors of the Federal Reserve System (Board) requests approval from the
Office of Management and Budget (OMB) to extend, with revision, the Federal Financial
Institutions Examination Council (FFIEC) Report of Assets and Liabilities of U.S. Branches and
Agencies of Foreign Banks (FFIEC 002; OMB No. 7100-0032) and Report of Assets and Liabilities
of a Non-U.S. Branch that is Managed or Controlled by a U.S. Branch or Agency of a Foreign (NonU.S.) Bank (FFIEC 002S; OMB No. 7100-0032). The Board submits this request on behalf of the
Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency
(OCC). No separate submission will be made by either of those agencies.
The FFIEC 002 is required and must be submitted quarterly by U.S. branches and agencies of
foreign banks. All U.S. branches and agencies of foreign banks are required to file detailed
schedules of assets and liabilities in the form of a condition report and a variety of supporting
schedules. This information is used to fulfill the supervisory and regulatory requirements of the
International Banking Act of 1978 (IBA). This report is mandated by the FFIEC for collection by
the Board, the FDIC, and the OCC (collectively the agencies) in accordance with procedures under
Title 10 of the Financial Institutions Regulatory Act. The FFIEC 002S is a mandatory supplement to
the FFIEC 002 and collects information on assets and liabilities of any non-U.S. branch that is
managed or controlled by a U.S. branch or agency of a foreign bank.1 A separate supplement is
completed for each applicable foreign branch. The FFIEC 002S data improve U.S. deposit and
credit data and data on international indebtedness, and are of assistance to U.S. bank supervisors in
determining the extent of assets managed or controlled by the U.S. agency or branch of the foreign
bank.
The agencies added the following two data items to the FFIEC 002 for December 31, 2008,
under the emergency clearance provisions of OMB’s regulations (1) number of noninterest-bearing
transaction accounts over $250,000 and (2) amount of noninterest-bearing transaction accounts over
$250,000. Because OMB’s approval of the agencies’ emergency clearance request expires on May
31, 2009, the agencies are now proposing under OMB’s normal clearance procedures to collect these
two items each quarter until the Transaction Account Guarantee Program ends. The current annual
burden for the FFIEC 002 is estimated to be 26,421 hours and would remain unchanged. The
current annual burden for the FFIEC 002S is estimated to be 1,560 hours and would remain
unchanged.

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Managed or controlled means that a majority of the responsibility for business decisions, including but not limited to
decisions with regard to lending or asset management or funding or liability management, or the responsibility for
recordkeeping in respect of assets or liabilities for that foreign branch resides at the U.S. branch or agency.

Background and Justification
Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks
(FFIEC 002)
The agencies use the FFIEC 002 report for supervisory and regulatory purposes. The Board
also uses the data for monetary policy purposes. The report is similar to the Call Report required of
all U.S. commercial banks, although the FFIEC 002 collects fewer data items of information.
The IBA expresses the intent of the Congress to equalize the supervisory and regulatory
treatment between foreign and domestic-owned financial institutions operating in the United States,
which specifies that foreign banks’ branches and agencies in the United States are to be subject to
the supervisory authority of the U.S. federal banking agencies and that responsibility for federal
supervision is to be shared among the agencies.
As one step in carrying out the supervisory and regulatory responsibilities imposed by the
IBA, the agencies instituted the FFIEC 002 report in June 1980. The FFIEC 002 replaced a Federal
Reserve report, FR 886a that had been collected from U.S. branches and agencies since 1972. The
FFIEC 002 report was revised extensively effective December 1985, when several schedules were
deleted, data items were added to collect separate data on International Banking Facilities (IBFs),
and schedules were added covering quarterly averages (Schedule K), commitments and
contingencies (Schedule L), and past due loans (Schedule N). The report also was revised to
conform as closely as possible to the quarterly Call Report for domestic banks.
Effective June 2001, the agencies expanded the information collected in the FFIEC 002 to
facilitate more effective analysis of the impact of securitization and asset sale activities on credit
exposures, introduced a separate new schedule (Schedule S) that comprehensively captures
information related to securitization and asset sale activities, and eliminated the confidential
treatment for the information on Schedule N. Effective December 2001, the agencies changed the
manner in which branches and agencies report information on their trust activities. Branches and
agencies that previously filed the Annual Report of Trust Assets (FFIEC 001) instead began to file a
new Fiduciary and Related Services Schedule (Fiduciary Schedule) (Schedule T) as part of the
FFIEC 002. Branches and agencies that have fiduciary or related activity are required to report
certain trust information in Schedule T annually.
In addition to its supervisory and regulatory uses, the FFIEC 002 report provides information
needed for monetary and financial analysis essential for the conduct of monetary policy. The
branches and agencies of foreign banks are a large and growing part of the U.S. banking system,
with assets exceeding $1 trillion as of March 31, 2001. The FFIEC 002 provides the benchmark data
needed to derive adequate weekly estimates from the sample report titled Weekly Report of Assets
and Liabilities for Large U.S. Branches and Agencies of Foreign Banks (FR 2069; OMB No.
7100-0030). The weekly estimates are used to analyze credit developments and sources and uses of
funds for the banking sector and to assess current financial developments within the entire U.S.
banking system. They help to interpret the bank credit and deposit information needed for both
monetary policy decisions and for gauging the response to those decisions.

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Report of Assets and Liabilities of a Non-U.S. Branch that is Managed or Controlled by a U.S.
Branch or Agency of a Foreign (Non-U.S.) Bank (FFIEC 002S)
For a number of years foreign banks have conducted a large banking business at branches
domiciled in offshore centers, primarily in the Cayman Islands and the Bahamas. For a fee, foreign
banks are able to use these offshore branches to conduct a banking business free of any U.S. reserve
requirements or FDIC premiums. While nominally domiciled in these offshore centers, these
branches are often largely run out of the banks’ U.S. agency or branch office, with a separate set of
books but often with overlapping management responsibilities. The transactions of these offshore
branches are often largely with U.S. residents.
The FFIEC 002S report is collected for several reasons: (1) to monitor deposit and credit
transactions of U.S. residents; (2) to monitor the impact of policy changes such as changes in reserve
requirements; (3) to analyze structural issues concerning foreign bank activities in U.S. markets; (4)
to understand flows of banking funds and indebtedness of developing countries in connection with
data collected by the International Monetary Fund and the Bank for International Settlements that
are used in economic analysis; and (5) to provide information to assist in the supervision of U.S.
offices of foreign banks, which often are managed jointly with these branches.
The FFIEC 002S collects detail on transactions with U.S. residents and with residents of the
banks’ home country. In most cases these data cover a large proportion of their total activities since
many of the non G-102 bank branches have heavy exposures to their home countries and G-10 banks
are dealing largely with U.S. customers. The data improve U.S. deposit and credit data and data on
international indebtedness, and are of assistance to U.S. bank supervisors in determining the extent
of assets managed or controlled by the U.S. agency or branch of the foreign bank. In theory a
foreign bank with an offshore branch and no U.S. presence would escape reporting. In practice this
omission is likely to be relatively minor because each of the fifty largest non-U.S. banks in the world
operates at least one agency or branch in the United States.
Description of Information Collection
The reporting panel for the FFIEC 002 includes all U.S. branches and agencies (including
their IBFs) of foreign banks, whether federally licensed or state chartered, insured or uninsured.
Each branch or agency of a particular foreign bank must submit a separate quarterly report, with one
exception. A foreign bank may submit a request to the appropriate Federal Reserve Bank to
consolidate reporting for two or more offices, provided that (1) the offices are located in the same
city or metropolitan area, the same state, and the same Federal Reserve District, and (2) the
consolidated report does not consolidate branches with agencies or insured branches with uninsured
branches.
While conforming generally to the U.S. commercial bank Call Report, the format of the
FFIEC 002 has been designed to reflect the portfolio patterns of branches and agencies of foreign
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The Group of Ten is made up of eleven industrial countries (Belgium, Canada, France, Germany, Italy, Japan, the
Netherlands, Sweden, Switzerland, the United Kingdom, and the United States) which consult and cooperate on
economic, monetary and financial matters.

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banks and their institutional character. There is more disaggregated reporting of foreign and
domestic customers than is required in the Call Report for domestic banks, and Schedule M of the
FFIEC 002 provides information on claims on, and liabilities to, the foreign bank head office and
other related institutions of the U.S. branches and agencies.
The FFIEC 002 consists of a summary schedule of assets and liabilities (Schedule RAL) and
several supporting schedules. Information is required in each schedule on balances of the entire
reporting branch or agency. On the schedules for cash (Schedule A), loans (Schedule C), and
deposits (Schedule E), separate detail is reported on balances of IBFs. Unlike the Call Report for
domestic banks, the FFIEC 002 collects no income data.
The FFIEC 002S covers all of the foreign branch’s assets and liabilities, regardless of the
currency in which they are payable. The supplement also covers transactions with all entities, both
related and nonrelated, regardless of location. All due from/due to relationships with related
institutions, both depository and nondepository, are reported on a gross basis, that is, without netting
due from and due to data items against each other. This reporting treatment of due to/due from
transactions with related institutions parallels the treatment called for in Schedule M of the
FFIEC 002, Due from/Due to Related Institutions in the U.S. and in Foreign Countries.
Both the assets and the liabilities sections of the supplement call for detail by location and
type of the other party to the transaction and by whether the transaction is denominated in U.S. or
non-U.S. currency. In addition, for claims on U.S. addressees (other than related depository
institutions) denominated in U.S. dollars, detail on type of claim is required. In general, the
definitions of the specific types of claims (that is, portfolio items) called for, and their reporting
treatment, correspond to the FFIEC 002 definitions of those data items. Further detail on
transactions with U.S. addressees denominated in U.S. dollars is reported in a Memoranda section.
All data items are reported in U.S. dollars. Transactions denominated in other currencies are
converted to U.S. dollars under currency translation procedures used for the FFIEC 002.
The Federal Reserve offers an electronic data transmission facility through which
respondents to various reports collected by the Federal Reserve may submit information. The
Internet Electronic Submission (IESUB) system was offered to U.S. branches and agencies of
foreign banks for electronic entry of the FFIEC 002 and the FFIEC 002S beginning in 1990.
Proposed Revisions
On Schedule O, Other Data for Deposit Insurance Assessments, the agencies added the
following two data items to the FFIEC 002 for December 31, 2008, under the emergency clearance
provisions of OMB’s regulations (1) number of noninterest-bearing transaction accounts over
$250,000 and (2) amount of noninterest-bearing transaction accounts over $250,000. These
revisions arose from interim and final rules approved by the FDIC Board of Directors on
October 23, 2008, and November 21, 2008, respectively, which implemented the FDIC’s Temporary
Liquidity Guarantee (TLG) Program. These two data items are submitted by eligible insured
depository institutions participating in the Transaction Account Guarantee Component of the TLG
program and allow the FDIC to determine assessment fees. Because OMB’s approval of the
agencies’ emergency clearance request expires on May 31, 2009, the agencies are now proposing

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under OMB’s normal clearance procedures to collect these two items each quarter until the
Transaction Account Guarantee Program ends.
Time Schedule for Information Collection
The FFIEC 002 and FFIEC 002S are collected as of the end of the last calendar day of
March, June, September, and December. U.S. branches and agencies of foreign banks must submit
the FFIEC 002 and FFIEC 002S to the appropriate Federal Reserve Bank within thirty calendar days
following the report date. After the processing and editing functions have been completed, the
Board sends the data to the FDIC and OCC for their use in monitoring the U.S. activities of foreign
banks under their supervision. Aggregate data for all U.S. branches and agencies that file the
FFIEC 002 are published in the Federal Reserve Bulletin and are also used in developing flow of
funds estimates and the estimates published in the Federal Reserve weekly H.8 statistical release,
Assets and Liabilities of Commercial Banks in the United States. Aggregate data for the
FFIEC 002S are available to the public upon request.
Individual respondent data, excluding confidential information, are available to the public
from the National Technical Information Service in Springfield, Virginia, upon request. The
information on file is provided on compact discs. In addition, individual respondent data are also
available on the FFIEC public web site at www.ffiec.gov/nicpubweb/nicweb/nichome.aspx.
Legal Status
The Board’s Legal Division has determined that section 7(c)(2) of the IBA [12 U.S.C. §
3105(c)(2)] authorizes the agencies to require the FFIEC 002 and FFIEC 002S. In addition, section
4(b) of the IBA [12 U.S.C. § 3102(b)] authorizes the OCC to collect the information from Federal
branches and Federal agencies of foreign banks. Further, section 7(a) of the Federal Deposit
Insurance Act [12 U.S.C. § 1817(a)] authorizes the agencies to collect the information from insured
branches of foreign banks. The Board’s Legal Division has also determined that the individual
respondent information on the FFIEC 002 contained in Schedule M (Due from/Due to Related
Institutions in the U.S. and in Foreign Countries) and the FFIEC 002S is exempt from disclosure
pursuant to the Freedom of Information Act [5 U.S.C. § 552(b)(4)]. Information from all other
schedules of the FFIEC 002 is available to the public on request.
Consultation Outside the Agency and Discussion of Public Comments
On December 23, 2008, the Board, under the auspices of the FFIEC and on behalf of the
FDIC and the OCC, published a notice in the Federal Register (73 FR 78794) requesting public
comment for 60 days on the extension, with revision, of the FFIEC 002 and the FFIEC 002S. The
comment period for this notice expired on February 23, 2009. The agencies did not receive any
comments. On April 2, 2009, the Board published a final notice in the Federal Register
(74 FR 14985) for the FFIEC 002 and FFIEC 002S.

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Estimate of Respondent Burden
The current estimated annual reporting burden for the FFIEC 002 is 26,421 hours and would
remain unchanged because burden was adjusted with the November 2008 emergency clearance
submission. The current estimated annual reporting burden for the FFIEC 002S is 1,560 hours. The
total annual burden for the FFIEC 002 and FFIEC 002S represents less than 1 percent of the total
Federal Reserve System burden.

FFIEC 002
FFIEC 002S
Total

Number of
respondents

Annual
frequency

Estimated
average hours
per response

Estimated
annual
burden hours

264
65

4
4

25.02
6

26,421
1,560
27,981

The total cost to the public is estimated to be $1,725,029 for the FFIEC 002 and FFIEC 002S.3
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The current annual cost to the Federal Reserve System for collecting and processing the
FFIEC 002 and the FFIEC 002S is estimated to be $221,900. The Federal Reserve System collects
and processes the data for all three of the agencies.

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Total cost to the public was estimated using the following formula. Percent of staff time, multiplied by annual burden
hours, multiplied by hourly rate: 30% Administrative or Junior Analyst @ $25, 45% Managerial or Technical @ $55,
15% Senior Management @ $100, and 10% Legal Counsel @ $144. Hourly rate estimates for each occupational group
are averages using data from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages 2007,
www.bls.gov/news.release/ocwage.nr0.htm. Occupations are defined using the BLS Occupational Classification System,
www.bls.gov/soc/.

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