International Banking Facility

From Wikipedia, the free encyclopedia

This article or section needs to be wikified to meet Wikipedia's quality standards.
Please help improve this article with relevant internal links. (December 2007)

An International Banking Facility (IBF) is a banking entity that any US bank, or a US branch/subsidiary of a foreign bank, or an Edge Act Corporation establishes in the United States to offer services to only non-US residents and institutions. The services offered include deposit and loan services.

Banks may maintain IBFs in their existing quarters, but the IBF's accounting must be separate from the bank's main books. Deposit and loan services provided by IBFs are free of Federal Reserve System reserve requirements.

The IBF concept was initially proposed to the Federal Reserve Board of Governors by the New York Clearing House Association in July 1978. It took until June 18, 1981 until the Board of Governors approved establishment of IBFs from December 3. IBFs were established to attract some of the money flowing out to offshore banking centers.