Bank Holding Company Supervision

Often, banks are owned and controlled by other corporations, which are referred to as bank holding companies (BHCs). Originally formed to avoid location and product restrictions on banks and later to provide bank owners certain tax advantages, BHCs are an important feature of the nation's banking system.

The Federal Reserve exercises consolidated supervisory oversight of holding companies, meaning that it is the "umbrella supervisor" for these companies. Functional regulators, however, retain supervisory responsibility for the portions of holding companies that fall within their jurisdiction.

umbrella