Guidance Issued on Framework for Board Supervision of Financial Holding Companies
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 the Gramm-Leach-Bliley Act's provisions for working with the functional regulators of the companies' securities, insurance, and commodities subsidiaries. There should be minimal, if any, noticeable change in the well-established relationships between the Federal Reserve and the primary supervisors of depository institutions controlled by financial holding companies.
"Effective financial holding company supervision requires strong, cooperative relationships between the Federal Reserve and primary bank, thrift, and functional regulators and foreign supervisors, "wrote Richard Spillenkothen, director of the Board's Division of Banking Supervision and Regulation. "These relationships respect the individual statutory authorities and responsibilities of the …
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Publication information: Article title: Guidance Issued on Framework for Board Supervision of Financial Holding Companies. Contributors: Not available. Journal title: Federal Reserve Bulletin. Volume: 86. Issue: 10 Publication date: October 2000. Page number: 685. © 1999 Board of Governors of the Federal Reserve System. COPYRIGHT 2000 Gale Group.