TAILIEUCHUNG - Who Regulates Whom? An Overview of U.S. Financial Supervision

In Spain, the savings banks’ model enables them to devote a substantial part of their profits to what is known as the Obra Social, whose allocation, distribution, policy and administra- tion are decided independently by the savings bank. French savings banks have launched the Local and Social Economy Projects (Projets d’Economie Locale et Sociale, PELS), a programme through which they finance local projects that will foster business or economic value and support people in fragile social situations. These various operational solutions adopted for the implementation of socially responsible activities can be combined with one another, in order to reach the best. | Who Regulates Whom An Overview of . Financial Supervision Mark Jickling Specialist in Financial Economics Edward V. Murphy Specialist in Financial Economics December 8 2010 Congressional Research Service 7-5700 R40249 CRS Report for Congress------------- Prepared for Members and Committees of Congress Who Regulates Whom An Overview of . Financial Supervision Summary This report provides an overview of current . financial regulation which agencies are responsible for which institutions activities and markets and what kinds of authority they have. Some agencies regulate particular types of institutions for risky behavior or conflicts of interest some agencies promulgate rules for certain financial transactions no matter what kind of institution engages in it and other agencies enforce existing rules for some institutions but not for others. These regulatory activities are not necessarily mutually exclusive. There are three traditional components to . banking regulation safety and soundness deposit insurance and adequate capital. The Dodd-Frank Wall Street Reform and Consumer Protection Act . 111-203 added a fourth systemic risk. Safety and soundness regulation dates back to the 1860s when bank credit formed the money supply. Examinations of a bank s safety and soundness is believed to contribute to a more stable broader economy. Deposit insurance was established in the 1930s to reduce the incentive of depositors to withdraw funds from banks during a panic. Banks pay premiums to support the deposit insurance fund but the Treasury provides full faith and credit for covered deposits if the fund were to run short. Deposit insurance is a second reason that federal agencies regulate bank operations including the amount of risk they may incur. Capital adequacy has been regulated since the 1860s when wildcat banks sought to make extra profits by reducing their capital reserves which increases their risk of default and failure. Dodd-Frank created .

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