Federal Reserve Regulatory Framework
US Federal Reserve banking supervision and monetary policy regulation.
View original at Federal Reserve System
Federal Reserve Regulatory Framework
The Federal Reserve System serves as the central bank of the United States and primary regulator of bank holding companies and state member banks.
Federal Reserve Structure
Board of Governors
- 7 members appointed by President
- Monetary policy decisions
- Supervision and regulation
Federal Reserve Banks
- 12 regional banks
- Implement monetary policy
- Supervise member banks
FOMC
- Federal Open Market Committee
- Sets monetary policy
- Interest rate decisions
Supervisory Responsibilities
Entities Supervised
- Bank holding companies (BHCs)
- Savings and loan holding companies
- State member banks
- Foreign banking organisations in US
- Systemically important financial institutions (SIFIs)
Key Regulations
Regulation Y
- Bank holding company activities
- Acquisitions and mergers
- Capital requirements
Regulation K
- International banking operations
- Foreign banks in US
- US banks abroad
Regulation D
- Reserve requirements
- Deposit classifications
Regulation Q
- Capital adequacy
- Basel III implementation
Enhanced Prudential Standards
For large banks (assets > $250 billion):
- Capital planning and stress testing
- Liquidity requirements
- Risk management requirements
- Single-counterparty credit limits
- Early remediation
Stress Testing (CCAR/DFAST)
Comprehensive Capital Analysis and Review
- Annual capital plan submission
- Qualitative and quantitative assessment
- Planned capital actions
Dodd-Frank Act Stress Testing
- Severely adverse scenarios
- Capital adequacy projection
- Public disclosure
Supervision Ratings
CAMELS
- Capital adequacy
- Asset quality
- Management
- Earnings
- Liquidity
- Sensitivity to market risk
LFI Rating System
- For large financial institutions
- Governance and controls
- Capital
- Liquidity