bank holding company

(FINANCE) a company that exists for the sole purpose of owning a controlling interest in the several branches of a bank.

Owing to the interplay of US federal and state banking laws, it is often necessary for a bank to incorporate itself as a separate and distinct company in different states, or for different business functions (e.g., capital management, underwriting/investment banking, savings banking, etc.).

One of the exasperating benefits that bank holding companies get is a further limitation of liability. Often, the structure of the bank holding company is such that one of the firms owned (like Washington Mutual Bank, Inc.) can be insolvent, without resulting in the liquidation of the holding company.

Practically every financial intermediary in the USA is now owned by a bank holding company. They're totally insidious!

16👍 5👎