The Fed's Role in Banking Supervision and Regulation

Congress gave the Fed broad regulatory and supervisory powers to enable it to address the nation's banking panics. The Fed exercises these powers to reduce risk in the nation's banking system. Objectives of the Supervision and Regulation function include protecting depositors' funds; protecting consumer rights related to banking relationships and transactions; and maintaining a stable, efficient and competitive banking system.

The Board of Governors writes regulations and creates supervisory policy for the Federal Reserve System. However, many of the Fed's banking supervision/regulation activities are delegated to the Reserve banks. These include conducting examinations, reviewing and approving most applications, and performing monitoring and surveillance activities.

The Fed supports our nation's dual banking system and believes that it strengthens the nation's economy. We work very closely with the state bank departments to ensure a consistent and unified supervisory approach for each state member bank.

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