March 25, 2002 News Archive

Interagency Guidance on Country Risk Management
The Board, along with the OCC and FDIC, issued enhanced guidance on country risk management for internationally active banking organizations (SR 02-5). The new guidance supplements and strengthens existing guidance with regard to country risk. Country risk is defined as the risk that economic, social, or political conditions in a foreign country might adversely affect an organization's financial condition, primarily through impaired credit quality or transfer risk. Transfer risk, which is evaluated by the Interagency Country Exposure Review Committee (ICERC), is the possibility that an asset cannot be serviced in the country of payment because the obligor's country lacks the necessary foreign exchange or has put restraints on its availability. See SR 99-35 for details on the ICERC process.

Board Announces New Interagency Standard for Electronic Loan Information
The Board announced the release of a new interagency standard for electronic loan information to be used with the ALERT application. The new standard is designed to improve the efficiency of the bank examination process and reduce the burden on banks, service providers, and vendors. Participation by institutions is voluntary, but they are encouraged to participate starting in the second quarter of 2002. The agencies will host meetings with service providers and software vendors in April to introduce the new electronic loan format. Additional information on the new standard will be out soon. For futher information, please contact Tracy E. Webb at (515) 241-1460.

Board Issues Letter on Information Sharing Pursuant to Section 314(b) of the USA PATRIOT Act
The Board issued SR 02-6 describing the new regulation for sharing information among financial institutions regarding terrorist financing and money laundering. The U.S. Department of the Treasury, through its Financial Crimes Enforcement Network (FinCEN), issued the regulation pursuant to section 314(b) of the USA PATRIOT Act. FinCEN's rule requires that all financial institutions that share information under section 314(b) have procedures in place to protect the security and confidentiality of shared information and to ensure that the information is used only for authorized purposes.

Beige Book Released
The Board released its most recent Beige Report dated March 6, 2002 indicating some signs of improvement in economic conditions in January and early February. Details are available in the full report, including individual Reserve Bank summaries.