FEDERAL RESERVE BANK OF NEW YORK …

                    FEDERAL RESERVE BANK OF NEW YORK
                            NEW YORK, N.Y. 10045-0001

                               AREA CODE 212-720-5000




                                              July 7, 2008



To:      The Chief Executive Officer of Each U.S Branch and Agency of
         a Foreign Bank Located in the Second Federal Reserve
         District


     The following report forms and instructions for the
June 30, 2008 reporting date have been posted to the Federal
Reserve Board's website at www.federalreserve.gov under
"Reporting Forms":

·       Report of Assets and Liabilities of U.S. Branches and
        Agencies of Foreign Banks (FFIEC 002);

·       Supplemental Report of Assets and Liabilities of a Non-U.S.
        Branch that is Managed or Controlled by a U.S. Branch or
        Agency of a Foreign (Non-U.S.) Bank (FFIEC 002s); and

·       The Country Exposure Report for U.S. Branches and Agencies of
        Foreign Banks (FFIEC 019).


    There are changes to the FFIEC 002 reporting form and
instructions, however, there are no changes to the FFIEC 002S
or 019 reporting forms or instructions for the June 30, 2008
report date.

     The FFIEC 002 reporting form and instructions for Schedule O
have been revised to replace items 1 through 7 and Memorandum
items 4 and 5 (including their sub items) with the following six
items:

    ·    Item A, Total deposit liabilities before exclusions (gross) as
         defined in Section 3(l) of the FDI Act and FDIC regulations.

    ·    Item B, Total     allowable        exclusions   (including   foreign
         deposits).
FEDERAL RESERVE BANK OF NEW YORK   2                    July 7, 2008



   ·   Item C, Total foreign deposits (included in item B above).

   ·   Item D, Total daily average of deposit liabilities before
       exclusions (gross) as defined in Section 3(l) of the FDI Act
       and FDIC regulations.

   ·   Item E, Total daily average of allowable exclusions (including
       foreign deposits).

   ·   Item F, Total daily average of foreign deposits (included in
       item E above).

     For an interim period covering the June 30, 2008, through
December 31, 2008, report dates, each FDIC-insured branch must
complete either:

(1) The revised format of Schedule O, items A through C on an
unconsolidated single FDIC certificate number basis and Memorandum
items 1 through 3; OR

(2) The current format of Schedule O, items 1 through 7 and
Memorandum items 1 through 5.

     The revised format will take effect for all FDIC-insured
branches on March 31, 2009, when the current format will be
eliminated. Although the use of the revised format is not required
for report dates in 2008, an FDIC-insured branch that chooses to
begin reporting under the revised format for any quarter-end report
date during the interim period may elect to report, on an
unconsolidated single FDIC certificate number basis, quarter-end
total deposits, allowable exclusions, and foreign deposits only (in
items A through C) or quarter-end balances and daily averages for
the quarter (in items A through F). However, once an FDIC-insured
branch chooses to begin reporting quarter-end total deposits,
allowable exclusions, and foreign deposits under the revised format
in any quarter during the interim period, it must continue to
report under the revised format of Schedule O each quarter
thereafter and may not revert back to the current format of
Schedule O. In addition, once an FDIC-insured branch begins to
report daily averages in any quarter during the interim period, it
must continue to report daily averages each quarter thereafter,
including in 2009 and subsequent years.      The deposit insurance
assessment base of an FDIC-insured branch that reports daily
averages for total deposits and allowable exclusions (including
foreign deposits) will be determined using the daily averages
rather than the branch's quarter-end balances.
FEDERAL RESERVE BANK OF NEW YORK   3                  July 7, 2008




    Below is supplemental guidance for the FFIEC 002 addressing
the reporting treatment of the Financial Accounting Standards 157
and 159.

Measurement of Fair Values in Stressed Market Conditions

     The valuation of various assets and liabilities on the balance
sheet ­ including trading assets and liabilities, available-for-
sale securities, loans held for sale, assets and liabilities
accounted for under the fair value option (which is discussed in
the following section), and foreclosed assets ­ involves the use of
fair values. During recent market stress events, the fair values
of some financial instruments and nonfinancial assets have
declined.

     The objective of a fair value measurement is to determine the
price that would be received to sell an asset or transfer a
liability in an orderly transaction (e.g., not a forced or
distressed sale) at the balance sheet date.      Accordingly, fair
values should reflect current market conditions and consider recent
transaction prices, where available. This fair value objective is
generally applicable to all fair value measurements, whether or not
a branch or an agency has early adopted FASB Statement No. 157,
Fair Value Measurements, which is discussed in the following
section.

     On October 3, 2007, the Center for Audit Quality (CAQ),
which is affiliated with the American Institute of Certified
Public Accountants, issued a white paper entitled Measurements of
Fair Value in Illiquid (or Less Liquid) Markets
(http://www.aicpa.org/caq/download/WP_Measurements_of_FV_in_Illiq
uid_Markets.pdf). The white paper discusses issues associated
with fair value measurement under existing generally accepted
accounting principles (GAAP) in the context of the conditions
that currently exist in many segments of the credit markets.
Although the CAQ's white paper was directed to auditors and
public companies, the paper articulates certain existing GAAP
requirements related to fair value measurement issues that apply
to all institutions. For FFIEC 002 reporting purposes, a branch
or agency should consider the fair value measurement information
contained in the CAQ's white paper.

FASB Statement No. 157 on Fair Value Measurement

     FASB Statement No. 157, Fair Value Measurements (FAS 157),
issued in September 2006, defines fair value, establishes a
framework for measuring the fair value of assets and liabilities
FEDERAL RESERVE BANK OF NEW YORK   4                 July 7, 2008



based on a three level hierarchy, and expands disclosures about
fair value measurements. The FASB's three-level fair value
hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). Level 1 inputs
are quoted prices in active markets for identical assets or
liabilities that the reporting branch or agency has the ability
to access at the measurement date (e.g., the FFIEC 002 reporting
date). Level 2 inputs are inputs other than quoted prices
included within Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 3 inputs are
unobservable inputs for the asset or liability.

     According to FAS 157, observable inputs are inputs that
reflect the assumptions market participants would use in pricing
the asset or liability developed based on market data obtained
from sources independent of the reporting entity. In contrast,
unobservable inputs are inputs that reflect the reporting
entity's own assumptions about the assumptions market
participants would use in pricing the asset or liability
developed based on the best information available in the
circumstances.

     FAS 157 is effective for fiscal years beginning after
November 15, 2007, and, with certain exceptions, is to be applied
prospectively. Branches or agencies must adopt FAS 157 for
FFIEC 002 reporting purposes in accordance with the standard's
effective date. Thus, a branch or agency with a calendar year
fiscal year must adopt FAS 157 as of January 1, 2008.

FASB Statement No. 159 on Fair Value Option

     FASB Statement No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities (FAS 159), issued in February
2007, would allow to report certain financial assets and
liabilities at fair value with the changes in fair value included
in earnings. In general, a branch or agency may elect the fair
value option for an eligible financial asset or liability when it
first recognizes the instrument on its balance sheet or enters
into an eligible firm commitment. A branch or agency may also
elect the fair value option for eligible items that exist on the
effective date of FAS 159. A branch or agency's decision to
elect the fair value option for an eligible item is irrevocable.
A branch or agency that elects the fair value option is expected
to apply sound risk management and control practices to the
assets and liabilities that will be accounted for at fair value
under the option.
FEDERAL RESERVE BANK OF NEW YORK   5                 July 7, 2008



     FAS 159 is effective for financial statements issued by the
parent bank for fiscal years that begin after November 15, 2007,
and should not be applied retrospectively to prior fiscal years,
except as permitted in the standard's early adoption provisions.
A branch or agency may adopt FAS 159 and elect the fair value
option for existing eligible items as of the beginning of a
fiscal year that begins on or before November 15, 2007, subject
to the conditions set forth in the standard, one of which is a
requirement to adopt all of the requirements of FAS 157 at the
early adoption date of FAS 159 or earlier.

     On April 17, 2007, the Center for Audit Quality (CAQ), which
is affiliated with the American Institute of Certified Public
Accountants, issued Alert No. 2007-14, FAS 159 Early Adoption
Date Approaching ­ Factors to Consider
(http://www.thecaq.org/newsroom/pdfs/CAQPressRelease_041807a.pdf)
The Alert summarized the principles and objectives of the fair
value option as set forth in FAS 159 and provides factors to
consider in determining whether an entity has substantively
adopted FAS 159 on a go forward basis. Although the CAQ's Alert
was directed to auditors and public companies, the factors
concerning the evaluation of an entity's purported early adoption
of FAS 159 are equally appropriate for nonpublic institutions.
For regulatory reporting purposes, branches and agencies are
expected to meet the principles and objectives of FAS 159 when
applying the fair value option and should consider the
information contained in the CAQ's Alert.

     In addition, beginning with the September 30, 2008 report,
U.S. branches and agencies that have adopted FASB Statement
No. 157, "Fair Value Measurements," and elected to account for
financial instruments at fair value under a fair value option or
have reported trading assets of $2 million or more for any of the
four preceding quarters will disclose the carrying amount of the
financial instruments as well as a breakdown of these assets and
liabilities into the three fair value levels under FASB's fair
value hierarchy and any netted amounts. See the federal register
notice specified below for all changes impacting the
September 2008 report.

Federal Register

     The Board of Governors of the Federal Reserve System (Board)
published in the Federal Register on April 4, 2008 the final
notice for revisions to the Report of Assets and Liabilities of
U.S. Branches and Agencies of Foreign Banks and Report of Assets
and Liabilities of a Non-U.S. Branch that is Managed or
Controlled by a U.S. Branch or Agency of a Foreign (Non-U.S.)
FEDERAL RESERVE BANK OF NEW YORK   6                      July 7, 2008



Bank (FFIEC 002 and FFIEC 002S) forms that will be implemented as
of September 30, 2008.


     The final federal register notice for the (FFIEC 002 and
FFIEC 002S) may be obtained at:
http://www.ffiec.gov/PDF/FFIEC_forms/FFIEC002_FFIEC002S_20080404_ffr
.pdf

Subscription Service

     We offer a subscription service which enables you to receive
recent news and updates on our reporting forms and instructions
and upcoming Bank events. You can sign up for this service at
the following website:
http://service.govdelivery.com/service/subscribe.html?code=USFRBN
EWYORK_8

Reports Monitoring

     Please note that the timeliness of receipt of each of these
reports will be monitored and the submission of initial data via
facsimile, even if prior to the deadline, does not constitute
timely filing.

     An original and one copy of the completed FFIEC 002 and
FFIEC 002S report(s) (if applicable) must be returned to this
Bank, by mail or messenger, no later than July 30, 2008.    Any
FFIEC 002/002S report received after 5:00 p.m. on July 30, 2008
will be considered late unless postmarked by July 28 or sent
overnight service by July 29.

     An original and one copy of the completed FFIEC 019 must be
returned to this Bank, by mail or messenger by August 14, 2008.
Any FFIEC 019 received after 5:00 p.m. on August 14, 2008 will be
considered late unless postmarked by August 11 or sent by
overnight service by August 13. Completed reports should be
submitted to:

                       Federal Reserve Bank of New York
                            Statistics Function
                       33 Liberty Street, 4th Floor
                            New York, NY 10045

     We will also continue to monitor the accuracy of the
periodic regulatory reports submitted for the June 30, 2008
report date. The staff of this Reserve Bank will monitor whether
banking organizations are meeting their basic reporting
FEDERAL RESERVE BANK OF NEW YORK   7                        July 7, 2008



requirements through the use of "validity edits." The current
edits for the FFIEC 002/002S and FFIEC 019 reports that were sent
to you in a previous mailing.

Electronic Submission Option

     Electronic submission of the FFIEC 002/002S reports is
available to all U.S. branches and agencies. We encourage you to
take advantage of this method of reporting submission. Vendors
have developed a software package that provides the means to
submit the FFIEC 002/002S electronically. Submitting reports
electronically using the software package provides the following
benefits:

   ·   A timely and efficient alternative to sending the report
       forms by mail; and

   ·   A printed report is generated that can serve as your
       institution's permanent record of the report.

   For information on filing the FFIEC 002/002S report
electronically, please contact Carolyn Polite at (212) 720-5415.

Website

     The FFIEC 002/002S and the FFIEC 019 forms and instructions
are available on the FFIEC website at:
http://www.ffiec.gov/ffiec_report_forms.htm.

     Questions regarding the FFIEC 002, FFIEC 002S and FFIEC 019
reports should be directed to Susanna Asaad, Senior Reports
Analyst in the Regulatory Reporting Division at (212) 720-8021,
or Henry Castillo, Team Leader in the Division at (212) 720-1318.

                                          Sincerely,

                                       -- Signed by Richard Molloy --

                                          Richard Molloy
                                          Statistics Officer
                                          Financial Reports Department


Enclosures