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Umbrella Supervision and the Role of the Central Bank

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Deregulation and financial consolidation have led to the development of financial holding companies-allowing commercial banking, insurance, investment banking, and other financial activities to be conducted under the same corporate umbrella-and the Federal Reserve has been named supervisor of the consolidated enterprise. This Policy Discussion Paper will show that there likely are economies of scope between the Fed’s inherent central-banking responsibilities and those of an umbrella supervisor and that these duel roles benefit both the Fed and functional regulators.

Suggested citation: Haubrich, Joseph G., and James, Thomson, 2005. "Umbrella Supervision and the Role of the Central Bank," Federal Reserve Bank of Cleveland, Policy Discussion Paper no. 05-11.

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