In December 2012, the Federal Reserve published a new framework for consolidated supervision of large financial institutions, which are generally U.S. bank and savings and loan holding companies with assets of $50 billion or more and foreign banking organizations with assets of U.S. operations of $50 billion or more. The new framework is described in a Supervision and Regulation (SR) letter issued by Federal Reserve staff.1
In the SR letter, the Federal Reserve stated that its primary supervisory objectives for large financial institutions will now be (1) to enhance resiliency of an institution to lower the probability of its failure or its becoming unable to serve as a financial intermediary, and (2) to reduce the impact on the financial system and the broader economy of an institution’s failure or material weakness. The Federal Reserve had not previously stated primary supervisory objectives other than safety and soundness of supervised institutions.
