Banking Law Assignment: Regulatory Authorities and Bank Subsidiaries

This assignment provides answers to questions related to banking law, focusing on the regulatory authorities within the American financial system and the structure of national banks. It identifies key regulatory bodies such as the Federal Reserve and the National Banking and Securities Commission, and explores the activities of bank holding companies and financial holding companies. Furthermore, it details the operating and financial subsidiaries of national banks, along with the qualifications and requirements for bank holding companies. The assignment also discusses the alternatives available to foreign banks establishing a presence in Florida and outlines the registration and advertising requirements for foreign bank branches. It concludes by addressing the composition requirements of an audit committee, providing a comprehensive overview of the regulatory landscape governing banking operations in the United States. Access more solved assignments and study resources on Desklib.

Running head: BANKING
Banking
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Q1) Regulatory Authorities
What are the Regulatory Bodies of the American Financial System. the regulatory bodies
from the top of the shareholders box include,
 The federal/central bank of America
 Bankers Association

The Regulatory Bodies of the American Financial System supervise all the organizations and
institutions that make up the financial system. We can differentiate 4 organizations with their
respective societies. First, there are Credit Institutions, made up of multiple banks,
development banks, limited purpose financial companies (SOFOLES). Later, there are
organizations and auxiliary credit activities, composed of general deposit warehouses,
financial leasing companies, financial factoring companies, credit unions, savings and loan
companies (SAPs), exchange houses. (Allman, 2006).
(Mishkin, n.d.).
Q2) For Box 1
That is why there are several regulatory bodies that operate jointly in the regulation and
supervision of the organizations that make up the American Financial System, such as the
Bank of America, which is the central bank of the American State; the National Banking and
Securities Commission whose purpose is to supervise and regulate, within the scope of its
competence, the financial entities; the National Insurance and Bonding Commission whose
function is the inspection and surveillance of mutual insurance institutions and societies
(Brennan & Barnes-Murphy, 2013).

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Q3) For Box 2- Example of an activity
Box 2 equals to a non-state bank. The activities conducted are the same as all the other banks.
They include deposit taking activities, issuing of credit , lending and even brokerage
activities.
Branch is understood as any secondary establishment endowed with permanent representation
and a certain management autonomy through which the activities of the parent company are
fully or partially developed.
Q4) For boxes 3 and 4, provide an example of operating subsidiaries of a national bank.
There are different examples of operating subsidiaries of a national bank. Examples include;
trust banks, credit card banks, the federal savings associations, national banks and the federal
branches.
Other include; credit unions , the federal Deposit insurance corporation, the federal reserve
board of America are the main subsidiaries (Brennan & Barnes-Murphy, 2013).
The responsibility of the branch is not independent of that of the main establishment, the
creditors of the branch being able to go against the parent company.
Q5) For box 5, provide an example of a financial subsidiary of a national bank.
A subsidiary example is commercial bank of America with subsidiaries in mortgages and
share brokerage.

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As they are not considered as the creation of a new company, they lack legal personality, so
they do not have to be subject to the procedures for setting up a new company.
In order to establish the branch in America, the foreign company must adopt the
corresponding agreement to create said branch and request the Spanish Consulate to certify
that the parent company is constituted in accordance with the laws of its country.
The agreement and the bylaws of the parent company itself must be translated into American
by a sworn translator, and will be presented in the Mercantile Registry together with the
consular certification (Antoine, Boise, Dionne, Gordon & Morriss, 2010). Constitution in any
credit institution a bank deposit for the amount agreed by the parent to establish the branch,
where appropriate.
Q6) Qualifications or requirements for a bank holding company
It is an essential requirement for subsequent registration in the Mercantile Registry that its
constitution be reflected in a public deed, raising to a public document the agreement of
incorporation adopted by the parent company.
This settlement must be submitted to the General Directorate of Taxes of the Autonomous
Community in which it has its registered office, accompanied by the social agreement for the
creation of the branch and the consular certification translated into American, as well as the
public deed of incorporation, the amount being of 1% of the share capital.
Q7) List alternatives available to a foreign bank to establish a presence in
the State of Florida

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There are different examples of operating subsidiaries of a national bank. Examples include;
trust banks, credit card banks, the federal savings associations, national banks and the federal
branches.
Other include; credit unions , the federal Deposit insurance corporation, the federal reserve
board of America are the main subsidiaries.
In the event that the company has already paid this or a similar one in its country of origin
due to the fact of creating the branch and having it endowed with a certain capital, it will be
exempt from paying it in America and must indicate it in the settlement form (Caprio,
Evanoff & Kaufman, 2006).
Q8)
Registration and registration advertising the negative designation certification is not required
for the registration of branches. It must be clear that what accesses the Registry is not the
foreign company but its establishment in the national territory. The registration must be made
in the Mercantile Registry that corresponds to the place of your address within the month
following the granting of the deed, duly authenticated documents must be presented
certifying: (Caprio, Evanoff & Kaufman, 2006).
Q9)
Once the branch is constituted, they must be reflected in the Administration .Declaration in
the Registry of Foreign Investments the Registry a whole series of acts: change of registered
office or denomination, renewal of directors' resignation, dissolution, and appointment of
liquidators, termination of liquidation, and bankruptcy or suspension of payments of the
company. Central banks were born in the glare of mercantilism and emerged as financial
mediators of private banks. Initially, central banks were responsible for facilitating payments

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between private banks, but they did not always have the role of being lenders of last resort
when a bank lacked liquidity (Caprio, Evanoff & Kaufman, 2006).
Q10) Composition requirement of the Audit committee
The audit committee should have 7 members. This is because, the final rule usually devides
the FBO s universe with consolidated global assets that are $50 billion or more. These are
banks with a non-branch asset of $50 Billion(IHC FBO)
References
Allman, B. (2006). Banking. Minneapolis, MN: Lerner Publications Co.
Antoine, R., Boise, C., Dionne, A., Gordon, R., & Morriss, A. (2010). Offshore Financial
Centers and Regulatory Competition. Lanham: Rowman & Littlefield Publishing Group,
Inc.
Brennan, L., & Barnes-Murphy, R. (2013). Banking. Mankato, MN: Childs World.
Caprio, G., Evanoff, D., & Kaufman, G. (2006). Cross-border banking. Singapore: World
Scientific.

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