The Federal Reserve Board of Governors announced Tuesday that the Industrial and Commercial Bank of China (ICBC) has agreed to risk management and compliance measures for its branch operating in New York City. The agreement does not include any fines or penalties.
Fast facts
- The agreement, dated Nov. 4 but released by the Fed today, states that a recent examination by the Federal Reserve Bank of New York uncovered risk management deficiencies and that the bank and the reserve bank have mutually agreed to remedies that include sustainable corporate governance and risk management controls.
- One facet of the agreement pertains to credit risk, specifically: “Within 60 days of this Agreement, the Bank and Branch shall jointly submit a written plan to improve monitoring and managing of credit risk at the Branch acceptable to the Reserve Bank.”
- In recent months the global economy has been rocked by news of the potential default of troubled Evergrande Group. The second-largest property developer in China owes a reported US$300 billion to multiple financial institutions globally. The ICBC is one of the top three lenders to Evergrande, and while other major banks have rushed to calm investors, ICBC has not disclosed or detailed its exposure.
- The crypto market is not spared from the ongoing Evergrande crisis. On Nov. 11, rumors of a potential Evergrande default sent crypto prices down 5% on average, until a last-minute debt repayment lifted the markets.