Define: Bank Holding Company

Business, Legal & Accounting Glossary

Definition: Bank Holding Company



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Full Definition of Bank Holding Company


A bank holding company is a company that owns or control over 25% of a bank. A company that owns or controls more than 25% of a bank holding company is also considered a bank holding company. A bank holding company is regulated pursuant to the Bank Holding Company Act of 1956, as amended. A bank holding company is required to register with the Board of Governors of the Federal Reserve System. In 1966, the Bank Holding Company Act of 1956 was amended to detail acquisitions of bank holding companies. In 1970, the Bank Holding Company Act of 1956 was further amended to limit the business activities of a bank holding company to bank-related activities only. However, in 1999, the Gramm-Leach-Bliley Act (i.e. Financial Service Modernization Act) deregulated bank holding companies. Under this act, a bank holding company could elect to become a financial holding company. Upon filing a declaration with its particular reserve bank, the bank holding company, as a financial holding company, was able to purchase investment firms or insurance companies. As a financial holding company, a bank holding company could also create an affiliate to handle investments and insurance services. In 2008, as a result of several bankruptcies, buy-outs, and government takeovers of many major financial institutions (i.e. Bear Sterns, Fannie Mae, Freddie Mac, Merrill Lynch, Lehman Brothers, etc.), the US government took actions to ensure that a bank holding company was no longer able to act as an investment bank. Bank holding companies were once again required to focus on banking activities.


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Bank Holding Company. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/bank-holding-company/ (accessed: April 07, 2020).
American Psychological Association (APA):
Bank Holding Company. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/bank-holding-company/

Definition Sources


Definitions for Bank Holding Company are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February, 2020