The Federal Reserve may prevent the formation of a financial holding company if one of its insured depository institution subsidiaries is not well capitalized.

Question

Quizplus · Accepted Answer

This statement is true according to the Federal Reserve's regulations for Financial Holding Companies (FHCs). Under these regulations, if an insured depository institution subsidiary of a proposed FHC is not well capitalized, the Federal Reserve may deny the formation of the FHC.

The Federal Reserve May Prevent the Formation of a Financial