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. Bank

    A financial institution licensed as a receiver of deposits. There ...
  4. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  5. Federal Reserve System - FRS

    The central bank of the United States. The Fed, as it is commonly ...
  6. Finance

    The science that describes the management, creation and study ...
Related Articles
  1. Bag The Best Bank Account
    Insurance

    Bag The Best Bank Account

  2. Tired Of Banks? Try A Credit Union
    Retirement

    Tired Of Banks? Try A Credit Union

  3. Are Your Bank Deposits Insured?
    Savings

    Are Your Bank Deposits Insured?

  4. 9 Tips For Safeguarding Your Accounts
    Options & Futures

    9 Tips For Safeguarding Your Accounts

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center