Regulation K

DEFINITION of 'Regulation K'

One of the regulations set forth by the Federal Reserve. Regulation K provides governance on the international banking front, offering guidelines for bank holding companies that engage in international trade and also foreign banks located domestically. It limits the kinds of business and financial practices and transactions in which foreign banks located domestically can participate.

BREAKING DOWN 'Regulation K'

Regulation K allows corporations that qualify under the Edge Act to participate in a wide variety of global banking practices. It also allows domestic banks to own entire nonfinancial foreign business entities. Reserve requirements are also imposed on Edge Act corporations under this statute.

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