DEFINITION of 'Foreign Bank Supervision Enhancement Act - FBSEA'
An act enacted on December 19, 1991 to increase the Federal Reserve's authority over foreign banks seeking entry into the United States. Part of the Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991. The act enabled the Fed to not only supervise authorization of foreign banks applying for operating ability in the U.S., but also existing foreign banks already operating within the country.
BREAKING DOWN 'Foreign Bank Supervision Enhancement Act - FBSEA'
Foreign banks were able to operate within the United States free of federal regulation until the International Banking Act of 1978 was passed. When enacted, the act limited foreign banks' geographic expansion and banking activities to similar U.S.-based banks and required foreign banks to carry adequate reserves. By the time the Federal Bank Supervision Enhancement Act was passed, more than 280 foreign banks were operating in the U.S., and held more than $626 billion in assets, or 18% of all banking assets in the U.S.