Federal · Title 12 — Banks and Banking
12 U.S.C. § 3904: Reserves
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a failure by such public or private borrowers to make full interest payments on external indebtedness; a failure to comply with the terms of any restructured indebtedness; or a failure by the foreign country to comply with any International Monetary Fund or other suitable adjustment program; or no definite prospects exist for the orderly restoration of debt service. Such reserves shall be charged against current income and shall not be considered as part of capital and surplus or allowances for possible loan losses for regulatory, supervisory, or disclosure purposes. The appropriate Federal banking agencies shall analyze the results of foreign loan rescheduling negotiations, assess the loan loss risk reflected in rescheduling agreements, and, using the powers set forth in section 3907 of this title (regarding capital adequacy), ensure that the capital and reserve positions of United States banks are adequate to accommodate potential losses on their foreign loans. The appropriate Federal banking agencies shall promulgate regulations or orders necessary to implement this section within one hundred and twenty days after November 30, 1983 .
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