Deposit and loan services provided by IBFs are free of Federal Reserve System reserve requirements, and are not insured by the Federal Deposit Insurance Corporation.
The IBF concept was initially proposed to the Federal Reserve Board of Governors by the New York Clearing House association in July 1978.
It took until June 18, 1981 until the Board of Governors approved establishment of IBFs from December 3.
[2] IBFs were established to attract some of the money flowing out to offshore banking centers.
In the early 1980s, New York competed with other states, such as Florida, to attract IBF business.