For example, globalization makes group management and risk aggregation more challenging, and the increasing power of information technology creates both new opportunities and new risks. Furthermore, new products and new distribution channels are likely to affect your business and risk profile. The fiduciary and investment world has not been immune to problems caused by ineffective controls.
The task of holding company supervision thus involves an examination of the relationships between the bank and its affiliates as well as an evaluation of risks associated with those nonbank affiliates. Consolidated capital requirements also play a key role, by helping ensure that a holding company maintains adequate capital to support its group-wide activities and does not become excessively leveraged.