QUESTION: Marty, finally we decided to open a bank account in the USA which is not part of the CRS. But now we do not know which US-bank is safe enough and where to go! You mentioned that Goldmann Sachs, Citigroup, Morgan Stanley, Bank of America and JP Morgan Chase have derivative exposure linked back to Deutsche Bank. So those banks are not safe enough. The can fail in a contagion. You said also that Wells Fargo has the least derivative exposure.
In another article you said that the BANK of NEW YORK would be good as a custodian. Would the Bank of New York be safe enough in a contagion? The Bank of New York has a branch in Frankfurt. Could we open an USD-account in Frankfurt and still be outside the CRS? Or would this be a major fault.
Would you please give us a hint how to proceed as this choice is way over our head. Which bank is safe and outside of the CRS at the same time.
Thank you very much for sharing your experience and knowledge with us!
ANSWER: Wells Fargo is a bank that is perhaps more accessible. Bank of New York has a big custodian business. Wells Fargo does not have offices outside of the US that provide services to retail or small business customers. Remember that any branches of US banks outside the United States are not part of the Fed system and are not FDIC insured. If you want a retail type of arrangement then Wells Fargo may be better. Bank of America has probably the best facilities for wiring money internationally online.
If you are dealing with a US branch of any bank, it must be FDIC insured and that is per person, not per account or banks. You do not want any account with a US bank’s branch outside the USA for they would be under the control of the local central bank.
NOTE: I do not receive any referral fees from either Wells Fargo or Bank of New York. We do not accept any commission from banks or brokers for any referrals whatsoever. We maintain our strict policy of no conflicts or interest.