HSBC 2001 Annual Report Download - page 34

HSBC HOLDINGS PLC
Description of Business (continued)
32
other than banking, bank-related activities and a
limited number of non-banking activities determined
pursuant to the regulations issued by the Banking
and Financial Regulatory Committee. Total revenues
from non-banking activities are limited in the
aggregate to a maximum of 10 per cent of total net
banking revenues.
Credit institutions must also report monthly
(and, with respect to lease financings, quarterly) to
the Bank of France the names and related amounts of
certain customers (only for companies and
individuals engaged in commercial activities) having
loan utilisation exceeding €76,000. The Bank of
France then returns to each credit institution a list
stating, as to that credit institution's customers, total
loan utilisations from all reporting credit institutions.
Credit institutions must make periodic reports to
the Banking Commission summarising their
activities during the relevant period with detailed
breakdowns by category, including an income
statement, and certain additional data relating to
operations such as the number of employees, client
accounts and branches.
All credit institutions operating in France are
required by law to operate a deposit guarantee
mechanism for customers of commercial banks,
except branches of European Economic Area banks
which are covered by their home country’s guarantee
system. The contribution of each credit institution is
calculated on the basis of the aggregate deposits and
one-third of the gross customer loans held by such
credit institution. This contribution is weighted by
solvency criteria. In the event of the insolvency of an
authorised institution, the limit on compensation for
each depositor is €70,000.
French credit institutions are required to
establish appropriate internal control systems,
including with respect to risk management and the
creation of appropriate audit trails. The institution
must prepare an annual report for review by the
institution’s board of directors and the Banking
Commission regarding the institution’ s internal
procedures and the measurement and monitoring of
the institution’s exposure.