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.
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Famous quotes containing the words edge, act and/or corporation:
“Truth that peeps
Over the glasses’ edge when dinner’s done.”
—Robert Browning (1812–1889)
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“What I am anxious to do is to get the best bill possible with the least amount of friction.... I wish to avoid [splitting our party]. I shall do all in my power to retain the corporation tax as it is now and also force a reduction of the [tariff] schedules. It is only when all other efforts fail that I’ll resort to headlines and force the people into this fight.”
—William Howard Taft (1857–1930)