71-3
71-3
September 21, 1971
Dear Mr. _______________:
This is in reply to your letter of September 16, 1971.
Financial Code §3580 provides that, with the consent of the Superintendent of Banks, a bank may acquire and hold stock in a foreign bank. Whether consent is granted in a particular case depends upon whether the proposed acquisition is in the public interest and in accord with the standards of safe and sound banking. If the Superintendent finds that the proposed acquisition is in the public interest and in accord with the standards of safe and sound banking, he will grant consent; if he finds otherwise, he will deny consent. In making these findings, the Superintendent considers a number of factors and, as you might expect, the factors and the emphasis given to each of them vary from case to case. However, the most important factors are the condition and operations of the bank that proposes to make the acquisition, the amount and character of the acquisition, and the condition and operations of the foreign bank.
The failure of ____________________, a subsidiary of ___________________, has been a matter of serious concern to us. The events that led up to the failure are being studied carefully, and we are evaluating our procedures to determine what can be done to avoid similar situations in the future. Our study is not yet complete, but at this stage we do not feel that changes in the statutes are indicated.
If we may be of further assistance, please feel free to contact us.
Very truly yours,
DONALD E. PEARSON
Superintendent of Banks
By
JAMES F. CARRIG
Counsel