WASHINGTON -- The Federal Reserve, stung by the BCCI scandal, is quietly probing whether foreign banks operating in the United States had improper links with the Luxembourg bank, according to people familiar with the effort.
The sources interpreted the effort as a Fed attempt to avoid being blindsided again by the unfolding scandal.
About two weeks ago, Fed bank supervisors began asking directors and top executives to detail the extent of their banks' dealings with the Bank of Credit and Commerce International, the sources said. It's not clear how many banks are being scrutinized.
William Taylor, Fed director of bank supervision, and J. Virgil Mattingly, the agency's general counsel, could not be reached for comment. A spokesman, however, said, "We are not at this time doing reviews of foreign banks operating in the U.S. that may have ties with BCCI."