ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Bank holding companies constitute the largest segment of institutions supervised by the Federal Reserve, but the Federal Reserve also supervises state member banks, savings and loan holding companies, foreign banks operating in the United States, and other entities.

Detailed explanation-2: -What Do the Federal Reserve Banks Do? In addition to helping set monetary policy, the Reserve Banks’ responsibilities include supervising and examining member banks, providing key financial services, supporting the government, and serving their District.

Detailed explanation-3: -The Federal Reserve’s supervision activities include examinations and inspections to ensure that financial institutions operate in a safe and sound manner and comply with laws and regulations. These include an assessment of a financial institution’s risk-management systems, financial conditions, and compliance.

Detailed explanation-4: -Federal Reserve Banks are often called the “bankers’ banks” because they provide services to commercial banks similar to the services that commercial banks provide for their customers. Federal Reserve Banks distribute currency and coin to banks, lend money to banks, and process electronic payments.