Fed Expands Rule on U.S. Banks' Investments: The Federal Reserve Board approved a rule that expands U.S. banks' ability to invest in foreign companies. The rule, approved by written vote, allows a strongly capitalized and well-managed U.S. bank to invest in a foreign company an amount equal to 5% of its capital without the Fed's prior approval. Previously, the amount invested in any one foreign organization couldn't exceed the lesser of $25 million or 5% of capital without prior clearance from the central bank. The Fed also approved by written vote a rule requiring foreign banks with operations in multiple states to choose a "home state" by March 31, 1996. Foreign banks that fail to choose a home state will have one selected for them by the Fed, under an interstate banking bill approved by Congress last year.
Times Staff and Wire Reports
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