WASHINGTON - The Federal Reserve Board on Monday completed a Gramm-Leach-Bliley regulation governing financial subsidiaries.
The rule lets state-chartered banks that are members of the Federal Reserve System own subsidiaries that engage in certain financial activities like general insurance, securities, and travel agency sales.
Bank subsidiaries are barred from real estate investment and development, insurance underwriting, and merchant banking.
The rule also outlines the criteria that banks must meet to own financial subsidiaries, including sufficient capitalization and strong management.
The rule is intended to establish parity between state member banks and national banks, which were given similar powers last year by the Office of the Comptroller of the Currency.