Bank Holding Company
A bank holding company is a company that owns and controls one or more banks. Bank holding companies are regulated by the Federal Reserve Board and are subject to the Bank Holding Company Act of 1956. The purpose of the act is to ensure that the activities of the bank holding company are limited to those that are related to banking and do not involve activities that are not related to banking.
History of Bank Holding Companies
The concept of bank holding companies originated in the United States in the early 20th century. The first bank holding company was established in 1916 by J.P. Morgan & Co. The purpose of the company was to allow J.P. Morgan & Co. to control multiple banks in different states. This allowed the company to expand its banking operations beyond the state in which it was based. The Bank Holding Company Act of 1956 was passed in response to the increasing number of bank holding companies and the potential for them to become too powerful.
Table of Comparisons
| Bank Holding Company | Non-Bank Holding Company |
|---|---|
| Owns and controls one or more banks | Does not own or control any banks |
| Regulated by the Federal Reserve Board | Not regulated by the Federal Reserve Board |
| Subject to the Bank Holding Company Act of 1956 | Not subject to the Bank Holding Company Act of 1956 |
Summary
A bank holding company is a company that owns and controls one or more banks. Bank holding companies are regulated by the Federal Reserve Board and are subject to the Bank Holding Company Act of 1956. The purpose of the act is to ensure that the activities of the bank holding company are limited to those that are related to banking and do not involve activities that are not related to banking. For more information about bank holding companies, visit the Federal Reserve Board website or the website of the Office of the Comptroller of the Currency.
See Also
- Bank
- Financial Holding Company
- Savings and Loan Holding Company
- Financial Institution
- Bank Regulation
- Bank Merger
- Bank Consolidation
- Bankruptcy
- Financial Crisis
- Financial Services
