FFIEC002_FFIEC002S_20150903_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 for three years, without 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 (Non-U.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 annual burden for the FFIEC 002 is estimated to be 22,684 hours and the annual
burden for the FFIEC 002S is estimated to be 1,176 hours.

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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
(FFIEC 031 and FFIEC 041; OMB No. 7100-0036) required of all U.S. commercial banks and
savings associations, although the FFIEC 002 collects fewer data items.
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 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 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.
On February 7, 2011, the FDIC Board adopted a final rule amending the FDIC’s
regulations to redefine the assessment base used for calculating deposit insurance as prescribed
by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).
In June 2011, the agencies implemented the following assessment-related reporting revisions to
the FFIEC 002 and FFIEC 002S through the emergency clearance process, effective with the
June 30, 2011, report date: (1) the deletion of existing data items for the total daily averages of
deposit liabilities before exclusions, allowable exclusions, and foreign deposits and (2) the
addition of data items for reporting average consolidated total assets, average tangible equity,
and the holdings of long-term unsecured debt issued by other FDIC-insured depository
institutions.

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In addition to its supervisory and regulatory uses, the FFIEC 002 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
Selected Assets and Liabilities of Domestically Chartered Commercial Banks and U.S. Branches
and Agencies of Foreign Banks (FR 2644; OMB No. 7100-0075). 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.
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 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 50 largest non-U.S. banks in the world operates at least one agency or branch
in the United States.

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The Group of Ten (G-10) 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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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.
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 and thrifts, 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.
Time Schedule for Information Collection and Publication
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 30
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. In
addition, individual respondent data are also available on the FFIEC public website 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. §

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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 May 6, 2015, the Board, under the auspices of the FFIEC and on behalf of the FDIC
and the OCC, published a notice in the Federal Register (80 FR 26050) requesting public
comment for 60 days on the extension, without revision, of the FFIEC 002 and FFIEC 002S.
The comment period for this notice expired on July 6, 2015. The agencies received one
comment expressing support for extension of the FFIEC 002 and FFIEC 002S. On August 18,
2015, the Board published a final 30 day notice in the Federal Register (80 FR 49999). The
comment period for this notice expires on September 17, 2015.
Estimate of Respondent Burden
The current estimated annual reporting burden for the FFIEC 002 is 22,684 hours, and the
current estimated annual reporting burden for the FFIEC 002S is 1,176 hours and would remain
unchanged. These reporting requirements represent less than 1 percent of the total Federal
Reserve System paperwork burden.
Number of
respondents3
223
49

FFIEC 002
FFIEC 002S

Annual
frequency
4
4

Total

Estimated
average hours
per response
25.43
6

Estimated
annual burden
hours
22,684
1,176
23,860

The total cost to the public for the FFIEC 002 and FFIEC 002S is estimated to be $1,234,755.4
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.

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Of these respondents, the number of small entities as defined by the Small Business Administration (i.e., entities
with less than $550 million in total assets) is 89 for the FFIEC 002 and 11 for the FFIEC 002S.
4
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $17, 45% Financial Managers at
$63, 15% Lawyers at $64, and 10% Chief Executives at $87). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2014, published March 25, 2015, www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

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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 FFIEC 002S is estimated to be $62,700.00. The Federal Reserve System collects
and processes the data for all three of the agencies.

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