DEFINITION of 'International Banking Act of 1978'
Federal banking legislation that put all domestic bank branches and agencies of foreign banks under the control of U.S. banking regulators. The International Banking Act mandated that foreign bank branches located in the U.S. adhere to the same regulations as U.S. banks.
BREAKING DOWN 'International Banking Act of 1978'
The international banking act provided FDIC insurance for domestic branches of foreign banks. It also required them to maintain a certain level of non-interest-bearing reserve account balances and also submit to regular audits. These foreign branches are subject to the same limitations as domestic banks.