#Fed Ends Novel Activities Supervision

The Fed is ending the special supervisory program it established to monitor banks' new businesses, such as crypto and fintech. It will now monitor these activities within its regular supervisory process. They say that because this program has provided a better understanding of the risks and how banks manage them, the special program is no longer necessary. The Fed originally launched this program in 2023 because the crypto market experienced significant difficulties the previous year: $2 trillion was wiped from its market capitalization, and nine major companies went bankrupt.

As a result, the Board is integrating that knowledge and the oversight of these activities into the standard supervisory process and is rescinding its 2023 supervisory letter, creating the program.