Learn how the Federal Reserve promotes the safety and soundness of individual financial institutions and monitors their impact on the financial system as a whole.

The Federal Reserve Act of 1913 established the Federal Reserve System to provide the nation with a safer, more flexible, and more stable monetary and financial system. One of the principal functions of the Federal Reserve in achieving this goal is to regulate and supervise various financial entities. It performs this function, in part, through microprudential regulation and supervision of banks; holding companies and their affiliates; and other entities, including nonbank financial companies that the Financial Stability Oversight Council (FSOC) has determined should be supervised by the Board and subject to prudential standards. In addition, the Federal Reserve engages in “macroprudential” supervision and regulation that looks beyond the safety and soundness of individual institutions to promote the stability of the financial system as a whole.

Transcript: https://www.federalreserve.gov/mediac...