The US Federal Reserve Board has issued the final guidelines that establish a transparent, risk-based and consistent set of factors for Reserve Banks to use when reviewing requests to access Federal Reserve accounts and payment services.
These guidelines are similar to those it proposed in May 2021 and the supplemental proposal in March 2022.
The Federal Reserve Board stated that institutions offering new types of financial products or novel charters have grown over recent years. Many of these have requested access to accounts, often known as ‘master accounts’, and payment services offered by Federal Reserve Banks.
These new guidelines will enable Reserve Banks to assess the requests with a transparent and consistent set of factors.
Vice chair Lael Brainard said, “The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system.”
The guidelines include a tiered review framework to provide additional clarity on the level of due diligence and scrutiny that Reserve Banks will apply to different types of institutions with varying degrees of risk.
For example, institutions with federal deposit insurance would be subject to a more streamlined level of review, while institutions that engage in novel activities and for which authorities are still developing appropriate supervisory and regulatory frameworks would undergo a more extensive review.
In response to public comments, the tiered framework was refined to provide more comparable treatment between non-federally-insured institutions chartered under state and federal law.
Last year, the chairman of the US Federal Reserve Jerome Powell claimed he is more worried about cyber risk than the possibility of another financial crash. He stated that a cyber event could have a big part in halting the financial system, but the risk of a 2008-style financial collapse is very low.
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