Regulation W

AAA

DEFINITION of 'Regulation W'

A Federal Reserve regulation that established terms for transactions between banks and their affiliates. Regulation W was enacted by Congress as part of the Federal Reserve Act and applies to all federally-insured depository institutions.

Regulation W requires that transactions between member banks meet certain stipulations, such as:
- Credit extended to an affiliate bank must be secured
- Transactions with any one affiliate total no more than 10% of an institution's capital
- Transactions to all affiliates total no more than 20% of an institution's capital

INVESTOPEDIA EXPLAINS 'Regulation W'

Financial institutions found in violation of Regulation W can be fined substantial civil penalties. The amount of the civil money fine is determined by several factors including if the violation was caused with intent, if it was undertaken with reckless disregard for the institution's financial safety and soundness, and if it results in any type of gain to the perpetrator.

RELATED TERMS
  1. FDIC Insured Account

    An account that meets the requirements to be covered or insured ...
  2. Insured Financial Institution

    Any bank or savings institution that is covered by some form ...
  3. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  4. Finance

    The science that describes the management, creation and study ...
  5. Bank

    A financial institution licensed as a receiver of deposits. There ...
  6. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
Related Articles
  1. Insurance

    Bag The Best Bank Account

    Take advantage of the deals banks offer, and find the right account for your financial situation.
  2. Retirement

    Tired Of Banks? Try A Credit Union

    These nonprofit organizations can provide a range of services for lower fees.
  3. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  4. Options & Futures

    9 Tips For Safeguarding Your Accounts

    When it comes to keeping your money safe, don't rely on the FDIC - there's much more you can do.
  5. Home & Auto

    Are My Investments Insured Against Loss?

    Money invested in a brokerage account has some protection, but that doesn't mean you can't lose it.
  6. Retirement

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  7. Options & Futures

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  8. Options & Futures

    Bank Failure: Will Your Assets Be Protected?

    The SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.
  9. Economics

    What’s Driving U.S. Stocks? Irony.

    A seesaw week for U.S. stocks ended on the upside last week, though the rally was more a function of slow growth rather than a booming economy.
  10. Investing

    Crowdfunding: Wide Opening For Tech Investors

    Crowdfunding has dramatically changed investing and opened the door for the public to get in on all types of exciting startups, including tech firms.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center