Acquisitions and Mergers
Under the authority assigned to the Federal Reserve by the Bank
Holding Company Act of 1956 as amended, the Bank Merger Act of 1960, and the
Change in Bank Control Act of 1978, the Federal Reserve Board maintains broad
authority over the structure of the banking system in the
The Bank Holding Company Act assigned to the Federal Reserve primary
responsibility for supervising and regulating the activities of bank holding
companies. Through this act, Congress sought to achieve two basic objectives:
(1) to avoid the creation of a monopoly or the restraint of trade in the banking
industry through the acquisition of additional banks by bank holding companies
and (2) to keep banking and commerce separate by restricting the nonbanking
activities of bank holding companies. Historically, bank holding companies
could engage only in banking activities and other activities that the Federal
Reserve determined to be closely related to banking. But since the passage of
the Gramm-Leach-Bliley Act, a bank holding company that qualifies to become a financial
holding company may engage in a broader range of financially related activities,
including full scope securities underwriting and dealing, insurance underwriting
and sales, and merchant banking. A bank holding company seeking financial
holding company status must file a written declaration with the Federal Reserve
System, certifying that the company meets the capital, managerial, and other
requirements to be a financial holding company.