MAY.31 '88 18:01 LINKLATERS & PHINES HK 5-8108133
P.003
LINKLATERS & PAINES
2.
We set out below a short explanation of what an Edge Act corporation is, which has been supplied to us by our client's Washington State lawyers: -
"Edge Act corporations are foderally ohartored international banking corporations in which national and state member banks of the Federal Reserve System may invest. Edge Act corporations were created under the Edge Act of 1919, which was substantially amended by the International Banking Act of 1978. Edge Act corporations were created for several reasons: (a) to provide federally supervised international banking and financial corporations with powers sufficiently broad to enable effective competition with foreign banks; (b) to provide a means of financing international trade to United States exporters and importers; (c) to foster participation by regional United States banks in international banking and financing services; (d) to stimulate competition by providing international banking and financing services throughout the United States; and (e) to facilitate the export of United States goods and services to achieve a sound United States trade position."
2. Excluded Assets
Both in the preparation of the Agreement dated 27 April, 1988, and in preparation of the draft Bill, Rainier and Daiwa have taken care to ensure that it will be clear what assets and liabilities are caught by the Bill, and what are not. It may assist to know that since their establishment in 1965, the Hong Kong Branches have been run quite autonomously from the branches in the United States and the very few instances where a customer or correspondent bank might have a relationship with both will have been identified and dealt with prior to completion of the Agreement or passage of the legislation. If despite these safe-guards, it is not clear in relation to some particular contractual relationship how it should be dealt with, then the draft Bill provides for a joint certificate by Rainier and Daiwa to be conclusive as to the manner in which it should be dealt with.
We hope the above assists, if you require any further information, please do not hesitate to contact the writer Mr. David Barnes.
Yours faithfully,
Lin Waterins
DAB46CLI