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:
“And hiving wisdom with each studious year,
In meditation dwelt, with learning wrought,
And shaped his weapon with an edge severe,
Sapping a solemn creed with solemn sneer.”
—George Gordon Noel Byron (1788–1824)
“Just as a waterfall grows slower and more lightly suspended as it plunges down, so the great man of action tends to act with greater calmness than his tempestuous desires prior to the deed would lead one to expect.”
—Friedrich Nietzsche (1844–1900)
“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)