Bancorporations

Bancorporations, also known as bank holding companies, are entities that own or control one or more banks. In the United States, a bank holding company is a company that owns a savings association or a bank. These organizations can be structured as either "grandfathered" companies, which existed before the Bank Holding Company Act of 1956, or as companies formed after this act. The primary function of a bancorporation is to manage its subsidiary banks, which may operate under different names or in various geographic locations. This structure allows for diversification of risk and facilitates expansion into new markets.

Regulation of bancorporations is a significant aspect of the financial system. In the U.S., the Federal Reserve Board oversees bank holding companies, ensuring they comply with capital requirements, risk management standards, and other prudential regulations. This oversight aims to maintain the stability of the financial system and protect depositors. Bancorporations can engage in a range of activities beyond traditional banking, including non-banking financial services, subject to regulatory approval. This can include activities like insurance, securities underwriting, and asset management. The ability to engage in these diverse activities allows bancorporations to offer a broader suite of financial products and services to their customers.