In fulfilling this role, the Federal Reserve is required to rely to the fullest extent possible on information and analysis provided by the appropriate supervisory authority of the company's bank, securities, or insurance subsidiaries. The Federal Reserve is also the primary federal supervisor of state member banks, sharing supervisory responsibilities with state agencies.
In this role, Federal Reserve supervisory staff regularly conduct on-site examinations and offsite monitoring to ensure the soundness of supervised state member banks. The Federal Reserve is involved in both regulation – establishing the rules within which banking organizations must operate – and supervision – ensuring that banking organizations abide by those rules and remain, overall, in safe and sound condition.