Supervising Large, Complex Financial Institutions: What Do Supervisors Do?

21 Pages Posted: 2 Mar 2017 Last revised: 16 Dec 2017

See all articles by Thomas M. Eisenbach

Thomas M. Eisenbach

Federal Reserve Banks - Federal Reserve Bank of New York

Andrew Haughwout

Federal Reserve Bank of New York

Beverly Hirtle

Federal Reserve Bank of New York - Banking Studies Department

Anna Kovner

Federal Reserve Bank of New York

David O. Lucca

Federal Reserve Banks - Federal Reserve Bank of New York

Matthew C. Plosser

Federal Reserve Banks - Federal Reserve Bank of New York

Multiple version iconThere are 2 versions of this paper

Date Written: 2017

Abstract

The supervision of large, complex financial institutions is one of the most important, but least understood, activities of the Federal Reserve. Supervision entails monitoring and oversight to assess whether firms are engaged in unsafe or unsound practices, and to ensure that firms take appropriate action to correct such practices. It is distinct from regulation, which involves the development and promulgation of the rules under which firms operate. This article brings greater transparency to the Federal Reserve’s supervisory activities by considering how they are structured, staffed, and implemented on a day-to-day basis at the Federal Reserve Bank of New York as part of the broader Systemwide supervisory program. The goal of the article is to generate insight into what supervisors do and how they do it. While the authors do not undertake to evaluate the effectiveness of the activities they describe, they note that understanding how supervision works is a critical precursor to determining how to measure its impact.

Keywords: bank supervision, large and complex financial companies

Suggested Citation

Eisenbach, Thomas M. and Haughwout, Andrew F. and Hirtle, Beverly and Kovner, Anna and Lucca, David O. and Plosser, Matthew C., Supervising Large, Complex Financial Institutions: What Do Supervisors Do? (2017). Economic Policy Review, Issue 23-1, pp. 57-77, 2017. Available at SSRN: https://ssrn.com/abstract=2925730

Thomas M. Eisenbach (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-6089 (Phone)

HOME PAGE: http://teisenbach.github.io/

Andrew F. Haughwout

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2685 (Phone)
212-720-1844 (Fax)

Beverly Hirtle

Federal Reserve Bank of New York - Banking Studies Department ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-7544 (Phone)
212-720-8363 (Fax)

Anna Kovner

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

David O. Lucca

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Matthew C. Plosser

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
96
rank
176,155
Abstract Views
465
PlumX Metrics