For immediate release

The Federal Reserve Board announced today its approval of the application of KBC Bank N.V., Brussels, Belgium, to establish a branch in New York, New York; an agency in Atlanta, Georgia; and a representative office in Los Angeles, California. Attached is the Board's Order relating to this action.

FEDERAL RESERVE SYSTEM KBC Bank N.V. Brussels, Belgium Order Approving Establishment of a Branch, Agency, and Representative Office

KBC Bank N.V. ("Bank"), Brussels, Belgium, a foreign bank within the meaning of the International Banking Act ("IBA"), has applied under section 7(d) of the IBA (12 U.S.C. � 3105(d)) to establish a branch in New York, New York, and an agency in Atlanta, Georgia. Bank has also applied under section 10(a) of the IBA (12 U.S.C. � 3107(a)) to establish a representative office in Los Angeles, California. The Foreign Bank Supervision Enhancement Act of 1991, which amended the IBA, provides that a foreign bank must obtain the approval of the Board to establish a branch, agency, or representative office in the United States. Notice of the application, affording interested persons an opportunity to submit comments, was published on November 9, 1998 in a newspaper of general circulation in New York, New York (New York Daily News); Atlanta, Georgia (Atlanta Journal and Constitution); and Los Angeles, California (Los Angeles Times). The time for filing comments has expired, and the Board has considered the application and all comments received. Bank, with consolidated total assets of $157 billion, is the second largest bank in Belgium.1  Through its offices and subsidiaries, Bank offers banking services in approximately thirty countries worldwide. Bank is a qualifying foreign banking organization within the meaning of Regulation K (12 C.F.R. 211.23(b)). Bank was established in connection with a series of mergers and related transactions creating its parent, KB ABB CERA Bank and Insurance Holding Company N.V. ("KBC Holding"), Brussels, Belgium.2  As part of these transactions, the former Kredietbank N.V. ("Kredietbank"), Brussels, Belgium, and the former CERA Bank C.V., Louvain, Belgium, were merged and their operations were contributed to Bank. Up until the merger, Kredietbank operated a branch in New York, New York; an agency in Atlanta, Georgia; and a representative office in Los Angeles, California. Bank has requested authority to retain and operate these offices through this application. Pursuant to Regulation K, the Board allowed the merger to proceed before an application to establish the offices was filed and acted on by the Board.3 In order to approve an application by a foreign bank to establish a branch, agency, or representative office in the United States, the IBA and Regulation K require the Board to determine that the foreign bank applicant engages directly in the business of banking outside of the United States, and has furnished to the Board the information it needs to assess the application adequately. The Board also shall take into account whether the foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. �� 3105(d)(2), 3107(a)(2); 12 C.F.R. 211.24(d)(2), 211.24(c)(1)).4  The Board may also take into account additional standards as set forth in the IBA and Regulation K (12 U.S.C. � 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). As noted above, Bank engages directly in the business of banking outside the United States. Bank also has provided the Board with information necessary to assess the application through submissions that address the relevant issues. With respect to supervision by home country authorities, the Board previously has determined, in connection with an application involving another bank in Belgium, that the bank was subject to home country supervision on a consolidated basis.5  Bank is supervised by the Belgian Banking and Finance Commission (the "Commission") on substantially the same terms and conditions as that other bank. Based on all the facts of record, the Board has determined that Bank is subject to comprehensive supervision on a consolidated basis by its home country supervisor.6  The Board also has taken into account the additional standards set forth in section 7 of the IBA and Regulation K (see 12 U.S.C. � 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)). The Commission has no objection to the establishment of the proposed branch, agency, and representative office. With respect to the financial and managerial resources of Bank, taking into consideration Bank's record of operations in its home country, its overall financial resources, and its standing with its home country supervisors, the Board has also determined that financial and managerial factors are consistent with approval of the proposed branch, agency, and representative office. Bank appears to have the experience and capacity to support the proposed branch, agency, and representative office and has established controls and procedures for the proposed offices to ensure compliance with U.S. law. With respect to access to information about Bank's operations, the Board has reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates and has communicated with relevant government authorities regarding access to information. Bank and its parents have committed to make available to the Board such information on the operations of Bank and any of its affiliates that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Company Act of 1956, as amended, and other applicable federal law. To the extent that the provision of such information to the Board may be prohibited by law, Bank and its parents have committed to cooperate with the Board to obtain any necessary consents or waivers that might be required from third parties for disclosure of such information. In addition, subject to certain conditions, the Commission may share information on Bank's operations with other supervisors, including the Board. In light of these commitments and other facts of record, and subject to the condition described below, the Board concludes that Bank has provided adequate assurances of access to any necessary information that the Board may request. On the basis of all the facts of record, and subject to the commitments made by Bank and its parents, as well as the terms and conditions set forth in this order, the Board has determined that Bank's application to establish the branch, agency, and representative office should be, and hereby is, approved. Should any restrictions on access to information on the operations or activities of Bank and its affiliates subsequently interfere with the Board's ability to obtain information to determine and enforce compliance by Bank or its affiliates with applicable federal statutes, the Board may require termination of any of Bank's direct or indirect activities in the United States. Approval of this application also is specifically conditioned on compliance by Bank and its parents with the commitments made in connection with this application and with the conditions in this order.7  The commitments and conditions referred to above are conditions imposed in writing by the Board in connection with its decision and may be enforced in proceedings under 12 U.S.C. � 1818 against Bank and its affiliates. By order of the Board of Governors,8 effective October 27, 1999. (signed) Robert deV. Frierson Associate Secretary of the Board

Footnotes 1 Unless otherwise indicated, data are as of June 30, 1999. 2 Almanij N.V., Antwerp, Belgium, a publicly traded financial holding company, owns a majority interest in KBC Holding; the remaining interest is widely held. 3 See 12 C.F.R. 211.24(a)(3). 4 In assessing this standard, the Board considers, among other factors, the extent to which the home country supervisors: (i) ensure that the bank has adequate procedures for monitoring and controlling its activities worldwide; (ii) obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports, or otherwise; (iii) obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; (iv) receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; (v) evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No single factor is essential, and other elements may inform the Board's determination. 5 See Cr�dit Communal de Belgique S.A., 82 Federal Reserve Bulletin 104 (1996). 6 In this regard, KBC Holding and Almanij N.V. are also considered financial holding companies subject to the E.U. Directive on Consolidated Supervision and to oversight by the Commission. 7 The Board's authority to approve the establishment of the proposed offices parallels the continuing authority of the States of New York, Georgia, and California to license offices of a foreign bank. The Board's approval of this application does not supplant the authority of the States of New York, Georgia, and California, respectively, to license the proposed offices of Bank in accordance with any terms or conditions that they may impose. 8 Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich.

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1999 Orders on banking applications