Guidance Issued on Framework for Board Supervision of Financial Holding Companies

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The Federal Reserve Board on August 15, 2000, issued guidance outlining the purpose and scope of its supervision of financial holding companies authorized to engage in a diversified range of financial activities.

The Federal Reserve is responsible for determining that financial holding companies, on a consolidated basis, are operated in a manner that does not threaten the viability of their depository institution subsidiaries. Through August 11,365 banking organizations had elected to be treated as financial holding companies.

The guidance, contained in a supervisory letter (SR 00-13) to Federal Reserve supervisors as well as financial holding companies, focuses on …