The umbrella supervisor's responsibilities are clearly focused on protecting the insured and regulated depository subsidiaries of financial holding companies. Under this overall framework, the umbrella supervisor is to rely on the functional regulator as much as possible and is allowed to examine functionally regulated affiliates if, and only if, it believes that their activities are creating undue risk for the insured depository affiliate.
Put differently, the umbrella supervisor is charged with evaluating risks in the organization that could affect any bank or other insured depository affiliate. The Congress chose the Federal Reserve to be the umbrella supervisor based on our many years of experience with supervising bank holding companies and the Fed's central role in managing financial crises.