Back to the Parent: Holding Company Liability for Subsidiary Banks - A Discussion of the Net Worth Maintenance Agreement, the Source of Stength Doctrine, and the Prompt Corrective Action Provision

Authors

Cassandra Jones Havard, Temple University School of Law

Abstract

The unprecedented number of bank failures in the past several years has spawned a crisis in the industry and fueled an extensive debate about how federal regulators can effectively make banks more responsible for guaranteeing the soundness of their operations. For the federal regulators most involved-the Federal Deposit Insurance Corporation ("FDIC"), Office of Thrift Supervision ("OTS"), and the Federal Reserve Board ("FRB") -Congress is directing the effort to enhance the banks' guarantees of self-policing. Congress's basic response to the crisis has been to heighten the minimum capital levels the banks must maintain to avoid direct corrective intervention by the federal regulatory agencies. In implementing this response, Congress also has focused on the regulation of banks in a holding company structure.

Keywords

Banking and Finance Law, Common Law, Jurisprudence, Money, Insurance Law

Disciplines

Banking and Finance Law | Common Law | Insurance Law | Jurisprudence | Law

Recommended Citation

Cassandra J. Havard, Back to the Parent: Holding Company Liability for Subsidiary Banks - A Discussion of the Net Worth Maintenance Agreement, the Source of Stength Doctrine, and the Prompt Corrective Action Provision, 16 Cardozo L. Rev. 2353 (1995).
Available at: https://larc.cardozo.yu.edu/clr/vol16/iss6/16