Bank Holding Company
What is a bank holding company?
A bank holding company is a corporate entity that controls one or a few working bank companies.
More profound definition
To be viewed as a bank holding company, a firm must:
- Hold something like 25 percent of the voting shares in the bank.
- Control the election of a majority of the directors or trustees.
- Straightforwardly or in a roundabout way impacts the management or policies of the bank
The Federal Reserve Board controls U.S. bank holding companies.
Bank holding company model
There are in excess of 100 bank holding companies in the U.S. with assets greater than $10 billion. Most national banks that individuals are know all about are part of bank holding companies.
Features
- Holding companies of numerous sorts exist all through the economy. Berkshire Hathaway is one.
- The one-bank holding company is essentially a holding company for one bank yet it has a more limited history as a more flexible arrangement for an independent bank.
- A bank holding company is a corporate entity that claims a controlling interest in at least one banks.
