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An acronym for the Foreign Bank Supervision Enhancement Act of the US. A part of the reforms to the American banking system passed by congress in 1991 (in the wake of the BCCI and BNL scandals). This act requires the Federal Reserve to increase supervision of foreign owned banks operating in America. A new branch or office of a foreign bank now needs the approval of both the Fed and either the OCC or the state regulatory authority. In addition the foreign banks are now limited to lending based upon their American subsidiary rather than the capital of the whole bank.

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