Summary of Parsing the Content of Bank Supervision

Federal Reserve Bank of New York,

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Parsing the Content of Bank Supervision summary
Bank regulatory supervision and market discipline overlap in some areas.


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Regulators around the globe are responsible for monitoring the banking industry to ensure its “safety and soundness.” In the United States, the Federal Reserve executes these duties. In an exhaustive study of official documents, Paul Goldsmith-Pinkham, Beverly Hirtle and David Lucca of the Federal Reserve Bank of New York examine the scale, scope and consistency of the US supervisory environment and its overlap with market discipline. getAbstract suggests this scholarly report, dense with models and statistics, to policy makers and financial executives engaged in the intricacies of the US bank regulatory apparatus.

In this summary, you will learn

  • How the US Federal Reserve exerts supervisory pressure on banks,
  • What factors regulators focus on, and
  • Where regulatory supervision and marketplace discipline overlap.


Federal Reserve regulators inspect and supervise banks and their holding companies to preserve their “safety and soundness.” The Fed’s efforts are part of the global Basel banking framework, which focuses on three basic elements: “regulatory capital, market discipline and supervisory review.” The Fed...
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About the Authors

Paul Goldsmith-Pinkham is an economist at the Federal Reserve Bank of New York, where Beverly Hirtle is the director of research and David Lucca is a research officer.

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