Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/120824
Authors: 
Eisenbach, Thomas
Haughwout, Andrew
Hirtle, Beverly J.
Kovner, Anna
Lucca, David O.
Plosser, Matthew
Year of Publication: 
2015
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 729
Abstract: 
The Federal Reserve is responsible for the prudential supervision of bank holding companies (BHCs) on a consolidated basis. Prudential supervision involves monitoring and oversight to assess whether these firms are engaged in unsafe or unsound practices, as well as ensuring that firms are taking corrective actions to address such practices. Prudential supervision is interlinked with, but distinct from, regulation, which involves the development and promulgation of the rules under which BHCs and other regulated financial intermediaries operate. This paper describes the Federal Reserve's supervisory approach for large, complex financial companies and how prudential supervisory activities are structured, staffed, and implemented on a day-to-day basis at the Federal Reserve Bank of New York as part of the broader supervisory program of the Federal Reserve System. The goal of the paper is to generate insight for those not involved in supervision into what supervisors do and how they do it. Understanding how prudential supervision works is a critical precursor to determining how to measure its impact and effectiveness.
Subjects: 
bank supervision
large and complex financial companies
JEL: 
G21
G28
Document Type: 
Working Paper

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