Back to: BANKING, LENDING, & CREDIT INDUSTRY
Regulation Y is a regulatory regime promulgated by the US Federal Reserve Bank. It regulates corporate bank holding companies and state-member banks. Most notably, it establishes capital reserve ratios.
A Little More on What is Regulation Y
Regulation Y governs transactions by bank holding companies. Transactions requiring Federal Reserve approval include: Engaging in any non-banking activity, Mergers with or acquisitions of other bank holding companies or state member banks; are the appointment of executives of troubled bank holding companies or state member banks.
The amount of disclosure and compliance required of a regulated entity will depend upon the bank’s efficiency rating or how well it is run. The Federal Reserve rates the bank based upon management performance and composite ratings. Primarily, “well-run” banks are subject to less scrutiny when undertaking a regulated transaction. Though any proposed action is still subject to an administrative, 30-day, public-comment process. Troubled banks, on the other hand, are subject to extensive scrutiny.
References for “Regulation Y”