Edge Act Corporation (EAC)
An Edge Act Corporation is a subsidiary of a Bank or Bank Holding Company or Financial Holding Company, that is chartered by the Federal Reserve under Section 25A of the Federal Reserve Act, as amended in 1916 and 1919, to engage in foreign banking activities. The Federal Reserve Board authorizes U.S. and foreign banking and financial organizations to establish Edge Act Corporations. It also regulates and examines the foreign activities of Edge Act Corporations and their subsidiaries. Foreign banks operating in the U.S. are permitted to organize and own an Edge Act Corporation. An Edge Act Corporation is useful because, among other things, it separates the risks of domestic operations from those of international. Prior to 1919, U.S. institutions were not permitted to own foreign banks. An EAC can own branches in the U.S., but may only conduct transactions directly linked to international trade.
Read more about this topic: Edge Act
Famous quotes containing the words edge, act and/or corporation:
“It was her stern necessity: all things
Are of one pattern made; bird, beast, and flower,
Deceive us, seeming to be many things,
And are but one. Beheld far off, they differ
As God and devil; bring them to the mind,
They dull its edge with their monotony.”
—Ralph Waldo Emerson (1803–1882)
“We aim above the mark, to hit the mark. Every act hath some falsehood of exaggeration in it.”
—Ralph Waldo Emerson (1803–1882)
“The nearest the modern general or admiral comes to a small-arms encounter of any sort is at a duck hunt in the company of corporation executives at the retreat of Continental Motors, Inc.”
—C. Wright Mills (1916–1962)