Enclosed is an interagency statement by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation that was prepared to clarify the agencies' policy regarding the recognition of interest income derived from Brazil's recently-issued IDU Bonds.  Please forward this inter-agency statement to the appropriate officer of each state member bank and each banking Edge Corporation in your district that have Brazilian exposures and each state-chartered branch or agency of foreign banks.

                        Questions concerning this interagency statement should be directed to Michael K. Moore on extension 2295 or Michael G. Martinson on extension 3640.

ENCLOSURE MAY BE OBTAINED AT FEDERAL RESERVE BANK