The Federal Reserve Bank of San Francisco is responsible for coordinating
the supervision of all U.S. operations of 38 Foreign Banking Organizations
(FBOs), including key institutions from Japan, Korea, Taiwan, Hong Kong,
Philippines, Malaysia, India, and France, and examining 115 offices of
the FBOs located within the District. In 2000, the Banking Supervision
and Regulation (BS&R) Division continued to execute its robust international
program, focusing on three primary areas: supervising FBOs, analyzing
financial sector developments in key Asian and European countries, and
providing technical assistance and training to Asian supervisory authorities.
To strengthen FBO supervision, BS&Rís Country Analysis Unit (CAU)
works closely with foreign supervisors, meeting regularly to share information
on supervisory standards and procedures. For instance, CAU initiated and
hosted a System meeting with the Japanese Financial Supervisory Authority
to discuss the condition of major Japanese banks operating in the U.S.
and understand more about the changing Japanese bank supervision process.
Information gleaned at this meeting was used to refine and update the
supervisory strategy for Japanese FBOs. CAU analysts participate on fact-finding
trips to key Asian countries and coordinate technical assistance and training
programs for foreign supervisors.
An example of CAUís special analyses for 2000 includes a series of papers
on Japan entitled, A Look at Japanís Changing Financial Landscape:
Implications for Japanese City Banks. The series highlighted structural
changes underway in Japan, analyzed how they affect the banking sector,
and reviewed the supervisory implications. The papers stimulated a discussion
within the Federal Reserve about emerging trends in Japan and our supervisory
strategy for Japanese banks in 2001 and beyond. Other papers explored
the aftermath of the Asian financial crisis, including Foreign Bank
Acquisitions in Asia, which reviewed the efforts of major global banks
and financial institutions to expand into Asia following the crisis, and
Changes in Bankruptcy Law in Indonesia and Thailand, which reviewed
bankruptcy code changes and their implications in these countries.
Pacific Basin Monetary and Economic Studies
In 2000, the Economic Research Departmentís Center for Pacific Basin
Monetary and Economic Studies continued its mission of promoting research
on relevant economic issues and enhancing cooperation among the regionís
policymaking institutions. Research studies were completed on a range
of topics, including analyses of Japanís banking sector and regulatory
policy, early warning indicators of currency crises, macroeconomic performance
under different exchange rate regimes, and the impact of international
capital flow controls. Center staff members also edited and arranged commercial
publication of a volume of papers prepared by distinguished economists
for the Centerís conference on Financial Crises in Emerging Markets
held in September 1999. Scheduled for publication by Cambridge University
Press, the book is the third in a series of the Centerís conferences that
have been published by Cambridge Press.
Among the Centerís other activities, it collaborated for a second consecutive
year with the World Bank to organize a week-long training workshop for
senior policymakers on the subject of "Managing Capital Flows"
that was held in Bangkok, Thailand. The workshop sessions addressed the
problems of managing capital flows and dealing with financial crises and
contagion, and also addressed special topics, such as monitoring derivatives
activity. The audience included more than 50 experienced policymakers
from over 30 countries in Asia, Africa, and Eastern Europe. In addition
to Center staff members, other speakers came from the World Bank, the
OECD, the European Investment Bank, and Asian central banks. Center staff
members also made presentations at various conferences in Asia, including
programs organized by the Asian Development Bank Institute in Tokyo, the
Australian National University and IMF in Canberra, the Reserve Bank of
Australia, and the Hong Kong Monetary Authority.