FFIEC 019 18 Question Format OMB Supporting Statement

Supporting Statement for the
Country Exposure Report for U.S. Branches and Agencies of Foreign Banks
(FFIEC 019; OMB No. 7100-0213)
1.

Explain the circumstances that make the collection of information necessary.

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, with revision, the
Federal Financial Institutions Examination Council (FFIEC) Country Exposure Report for U.S.
Branches and Agencies of Foreign Banks (FFIEC 019; OMB No. 7100-0213). The Board
submits this request on behalf of the Board, Federal Deposit Insurance Corporation (FDIC), and
Office of the Comptroller of the Currency (OCC) (the agencies). No separate submission will be
made by the FDIC or OCC. The report is required and must be submitted quarterly by all
individual U.S. branches and agencies of foreign banks that have to tal direct claims on residents
of foreign countries in excess of $30 million. Each reporting branch or agency provides
information for supervisory purposes on its direct and indirect claims, total adjusted claims on
foreign residents, and information on commitments.
The agencies propose to revise the FFIEC 019 by removing the five-country limit on the
reporting of gross claims on foreign nations to which the U.S. branch or agency of a foreign bank
has its largest total exposures of at least $20 million, effective for the March 31, 2022, report
date.
2.

Indicate how, by whom, and for what purpose the information is to be used. Except
for a new collection, indicate the actual use the agency has made of the information
received from the current collection.

The FFIEC implemented the FFIEC 019 report in June 1986 in response to supervisory
concerns relating to funding practices of certain U.S. branches and agencies of foreign banks that
were raising funds in the United States and other nations’ interbank markets, and then lending the
bulk of the funds to home-country residents. Major funding problems emerged for these U.S.
offices when the governments of the home countries of the parent banks encountered severe
difficulties in servicing their external debt. In 1985 the Board, FDIC, and OCC proposed
collection of country exposure information from U.S. branches and agencies in order to supervise
their operations more effectively. The FFIEC 019 is an important and unique tool for surveillance
and oversight that collects the minimal amount of information needed for supervisory purposes.
Oversight of the liquidity positions of all banking offices in the United States is the
primary responsibility of the three federal bank supervisory agencies under the Basel Concordat,
which is an understanding among bank regulators of several countries relating to mutual
supervision of banks operating in international markets. Quarterly information on significant
country risk exposures is very important in measuring and supervising liquidity positions of the
branches and agencies of foreign banks, which fund themselves primarily in the U.S. domestic
money markets by taking large uninsured deposits from banks, corporations, and individuals.
Those branches that are insured by the FDIC also raise funds from retail customers. The financ ial
regulatory agencies need to be able to assess the institutions’ ability to repay these deposits, which

is jeopardized in branches that have an excessive volume of poor quality or slow paying assets.
One important indicator of potential underlying problems is an excessive concentration by
the U.S. branch or agency in assets due from a single country or a small number of countries.
Therefore, the regulatory agencies need to be able to make informed judgments regarding the
level of country concentrations within a specific branch or agency, to ensure that these
institutions, like domestic banking institutions, are practicing reasonable country risk
diversification. The FFIEC 019 assists the agencies in monitoring the extent to which the U.S.
branches and agencies are pursuing prudent diversification policies and limiting potential liquidity
pressures.
In addition, FDIC-insured branches of foreign banks are subject to an asset maintenance
requirement (12 CFR 347.210). Under this requirement, in general, an insured branch must
maintain on a daily basis eligible assets in an amount not less than 106 percent of the preceding
quarter’s average book value of the branch’s liabilities, exclusive of liabilities due to related
offices of the foreign bank. The FDIC may require that a higher ratio of eligible assets be
maintained if the financial condition of the insured branch warrants such action. Among the
factors that the FDIC considers in requiring a higher ratio is the concentration of transfer risk to
any one country, including the country in which the foreign branch’s head office is located. The
data from the FFIEC 019 report assist the FDIC in evaluating the existence of such concentrations
and determining whether to require that an insured branch maintain a higher ratio of eligible
assets than the 106 percent minimum.
In order to limit reporting burden, the FFIEC 019 has been designed to collect the
minimum amount of information needed to assess country exposure. The report currently requires
each of the U.S. branches and agencies with claims on foreign parties exceeding $30 million to
report (1) its exposure to borrowers in its home country and (2) each of the next five largest
country exposures, provided the exposure exceeds $20 million. These requirements are
considerably less burdensome than the information required of domestic banking institutions on
the FFIEC 009 Country Exposure Report (OMB No. 7100-0035), which requires information on
all country exposures and requires considerably greater maturity detail. Because smaller
institutions are often more likely to encounter funding problems than larger ones, the regulatory
agencies do not believe that it is appropriate to increase the minimum exposure level that must be
reported.
The FFIEC 019 report must be filed by each U.S. branch or agency of a foreign bank that
has total direct claims on foreign residents in excess of $30 million. Currently, the branch or
agency reports its total exposure (1) to residents of its home country and (2) to the other five
foreign nations to which its exposure is largest and is at least $20 million. The home country
exposure must be reported regardless of the size of the total claims for that nation.
Each reporting branch or agency must report, by country as appropriate, the information
on its direct claims (assets such as deposit balances, loans, or securities), indirect claims (which
include guarantees), and total adjusted claims on foreign residents, as well as information on
commitments. The respondent must also report information on claims on related non-U.S. offices
that are included in total adjusted claims on the home country, as well as a breakdown for the

2

home country and each other reported country of adjusted claims on unrelated foreign residents
by the sector of borrower or guarantor, and by maturity (in two categories: one year or less, and
over one year).
3.

Describe whether, and to what extent, the collection of information involves the use
of automated, electronic, mechanical, or other technological collection techniques or
other forms of information technology.

All affected institutions may submit their completed reports electronically using the
Federal Reserve’s Reporting Central application at https://www.frbservices.org/centralbank/reporting-central.
4.

Describe efforts to identify duplication. Show specifically why any similar
information already available cannot be used or modified for use for the purposes
described in Item 2 above.

The data collected through the FFIEC 019 are unique and cannot be replaced by data
already collected by the federal government.
5.

If the collection of information impacts small businesses or other small entities,
describe any methods used to minimize burden.

Of the respondents to the FFIEC 019, 22 are considered small entities as defined by the
Small Business Administration (i.e., entities with less than $600 million in total assets),
https://www.sba.gov/document/support--table-size-standards. There are no special
accommodations given to mitigate the burden on small entities.
6.

Describe the consequence to Federal program or policy activities if the collection is
not conducted or is conducted less frequently, as well as any technical or legal
obstacles to reducing burden.

The FFIEC 019 is filed quarterly as of the last business day of March, June, September,
and December. Each reporting branch or agency must file its report with the appropriate Reserve
Bank within 45 days of the report date. Quarterly information on significant country risk
exposures is very important in measuring and supervising liquidity positions of the branches and
agencies of foreign banks, which fund themselves primarily in the U.S. domestic money markets
by taking large uninsured deposits from banks, corporations, and individuals. Those branches
that are insured by the FDIC also raise funds from retail customers. The financial regulatory
agencies need to be able to assess the institutions’ ability to repay these deposits, which is
jeopardized in branches that have an excessive volume of poor quality or slow paying assets.
7.

Explain any special circumstances that would cause an information collection to be
conducted in a manner inconsistent with 5 CFR 1320.5(d)(2).

This information collection is conducted in a manner consistent with the guidelines in 5
CFR 1320.5(d)(2).

3

8.

Describe comments in response to the Federal Register notice and efforts to consult
outside the agency.

On May 7, 2021, the Board published an initial notice in the Federal Register (86 FR
24619) requesting public comment for 60 days on the extension, with revision, of the
FFIEC 019. The comment period for this notice expired on July 6, 2021. The agencies received
one comment from a banking trade association.
The commenter asked the agencies to clarify the definitions and treatment of certain
terms in the FFIEC 019 to be consistent with the FFIEC 009. The commenter stated that
consistency between these terms in the FFIEC 019 and FFIEC 009 would reduce burden on
firms that use FFIEC 009 definitions to report cross-jurisdictional data via the Systemic Risk
Report (FR Y-15; OMB No. 7100-0352). Specifically, the commenter asked the agencies to
clarify the FFIEC 019 instructions as follows: add sections on accounting and differences from
U.S. generally accepted accounting principles; add clarifying information to the Claims section
regarding the definition of “claims”; add instructions related to Indirect Claims, including
instructions related to required risk transfers (e.g., guarantees, insurance policies, and head
offices), collateralized claims, debt and equity securities, netting and offsetting, reporting credit
derivatives, and treatment of multi-name credit derivatives; and add specific instructions for
allocating claims to the rows. The agencies agree with the commenter’s suggestions and will
revise the FFIEC 019 instructions accordingly. The comment did not object to the agencies’
proposed revisions to the FFIEC 019, and the agencies will adopt those revisions as proposed.
On August 18, 2021, the Board published a final notice in the Federal Register (86 FR
46252) requesting public comment for 30 days on the extension, with revision, of the
FFIEC 019. The comment period for this notice expires on September 17, 2021.
9.

Explain any decision to provide any payment or gift to respondents, other than
remuneration of contractors or grantees.
There are no payments or gifts provided to respondents.

10.

Describe any assurance of confidentiality provided to respondents and the basis for
the assurance in statute, regulation, or agency policy. If the collection requires a
systems of records notice (SORN) or privacy impact assessment (PIA), those should
be cited and described here.

Information collected on the FFIEC 019 is confidential pursuant to exemption 8 of the
Freedom of Information Act (5 U.S.C. § 552(b)(8)), which specifically exempts from disclosure
information “contained in or related to examination, operating, or condition reports prepared by,
on behalf of, or for the use of an agency responsible for the regulation or supervision of financial
institutions.”
11.

Provide additional justification for any questions of a sensitive nature.
There are no questions of a sensitive nature.

4

12.

Provide estimates of the annual hourly burden of the collection of information.

As shown in the table below, the estimated total annual burden for the FFIEC 019 is
5,880 hours, and would increase to 6,200 with the proposed revisions. The agencies estimate
that, for the approximately 20 financial institutions expected to have more than five foreign
country exposures of at least $20 million to report, the proposed revision would impose, on
average, a 4-hour implementation burden to update each firm’s reporting systems and practices.
The estimated number of institutions with additional exposures to report is based on the number
of respondents that reported five foreign exposures of at least $20 million as of year-end 2020.
Once reporting systems are updated, the agencies believe that ongoing burden will not
substantially change because any increase in the total number of foreign exposures reported
would be approximately offset by the simplified assessment to determine which foreign
exposures to report. The estimated total number of respondents is based on year-end FFIEC 019
reporting for 2020. These reporting requirements represent less than 1 percent of the Board’s
total paperwork burden.
Estimated
number of
respondents

FFIEC 019

Estimated
Estimated
Annual
average hours annual burden
frequency
per response
hours

Current
FFIEC 019

147

4

10

5,880

Proposed
FFIEC 019 (ongoing)

147

4

10

5,880

20

4

4

320
6,200

FFIEC 019 (one-time)
Proposed Total
Change

320

The estimated total annual cost to the public for the FFIEC 019 is $347,802, and would
increase to $366,730 with the proposed revisions.
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 $20, 45% Financial Managers at $73, 15% Lawyers at $72, and 10% Chief Executives
at $95). 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 2020,
published March 31, 2021, http://www.bls.gov/news.release/ocwage.t01.htm. Occupations are
defined using the BLS Standard Occupational Classification System, http://www.bls.gov/soc/.
13.

Provide an estimate for the total annual cost burden to respondents or record
keepers resulting from the collection of information.
There are no annualized costs to the respondents.
5

14.

Provide estimates of annualized costs to the Federal government.

The estimated cost to the Federal Reserve System for collecting and processing the
FFIEC 019 is $13,100. The Federal Reserve System collects and processes the data for all three
of the federal bank regulatory agencies.
15.

Explain the reasons for any program changes or adjustments reported on the
burden worksheet.

The agencies propose to revise the FFIEC 019 by removing the five-country limit on the
reporting of gross claims on foreign nations to which the U.S. branch or agency of a foreign
bank has exposures of at least $20 million. The proposed revisions would become effective for
the March 31, 2022, report date.
Removal of the five-country reporting limit would allow supervisors to collect
information on all foreign countries for which a U.S. branch or agency of a foreign bank has
exposure of $20 million or above. The existing five-country limit was implemented at a time
when U.S. branches and agencies of foreign banks had a smaller presence in the U.S. and their
exposures to foreign nations were limited to their home country and one or two other nations
where the U.S. branch or agency conducted transactions primarily for financing trade. Currently,
there are larger U.S. branches and agencies of foreign banks that conduct a wider range of
transactions as part of the parent bank’s global strategy. For example, some U.S. branches are
now an integral part of the parent bank’s capital market operations engaging in funding
transactions between off-shore countries and other branches of the parent bank in other regions,
such as Europe, Asia, and Latin America.
According to the most recent FFIEC 019 data, a number of U.S. branches and agencies of
foreign banks had a fifth-country reported exposure above $50 million, and seven respondents
had a fifth-country exposure above $1 billion. This data provides evidence that the five-country
limit could be excluding sizeable foreign exposures. The proposed revision would facilitate
consistency of reporting across institutions for key components of foreign country exposure. The
additional reported data would allow supervisors to compare the amount of o ne institution’s
exposures to those of its peers for a country or set of countries, to analyze the aggregate
exposure of U.S. banks to foreign creditors, and to monitor trends in exposures.
The existing FFIEC 019 report form and instructions would be revised to remove the
five-country reporting limit. Specifically, references to “other five foreign nations to which its
exposure is largest and is at least $20 million” would be revised to read “other foreign nations to
which its exposure is at least $20 million.” The existing report form would be revised to permit
more than five line items to report foreign countries for which the total adjusted claims is largest
and is greater than or equal to $20 million. For consistency with other FFIEC reports, the
FFIEC 019 report form would be revised to add the list of countries and codes that are currently
reflected on the FFIEC 009. The instructions would be updated to direct respondents to leave
columns blank for countries below the disclosure threshold of $20 millio n.

6

16.

Provide information regarding plans for publication of data.

The agencies do not routinely publicly release information collected through the
FFIEC 019.
17.

If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons that display would be inappropriate.
No such approval is sought.

18.

Explain each exception to the topics of the certification statement identified in
“Certification for Paperwork Reduction Act Submissions.”
There are no exceptions.

7