Board of Governors of the Federal Reserve System

LISCC Program Overview

The Board of Governors of the Federal Reserve System (Board) established the Large Institution Supervision Coordinating Committee (LISCC) Program in 2010 based on lessons learned from the 2007–09 global financial crisis that revealed deficiencies in how large, systemically important firms had been supervised. These lessons learned underscore the need for the supervision of the largest firms to be more forward-looking and informed by analysis from multiple perspectives, including legal, accounting, payments, financial markets, consumer protection, and financial stability. The LISCC Program coordinates the Federal Reserve's supervision of large financial institutions that pose the greatest risk to U.S. financial stability.

Key elements of the LISCC Program include

• focus on U.S. financial stability as well as individual firm safety and soundness;
• incorporation of Federal Reserve Systemwide, multidisciplinary perspectives in determining supervisory priorities and execution of the supervisory program;
• use of both firm-specific and horizontal examinations in all core areas of the supervisory program;
• forward-looking assessments of firms' resiliency through stress testing; and
• integration of multiple sources of data and information to identify and explore risks and trends in the portfolio.

While the core business of supervision is common across all firms, the size, complexity, and systemic nature of firms supervised by the LISCC Program (LISCC firms) require a centralized, coordinated, and unified approach to the LISCC supervisory program. Consistent with the Consolidated Supervision Framework for Large Financial Institutions (LFI), the LISCC Program was created to fulfill three primary objectives:

• enhance the resiliency of LISCC firms to lower the probability of their failure or inability to serve as a financial intermediary;
• reduce the impact on the financial system and the broader economy in the event of a LISCC firm's failure or material weakness; and
• provide information to Federal Reserve decision-makers about issues and vulnerabilities at LISCC firms that could have an adverse impact on the broader financial system and economy.¹

To meet these objectives, the LISCC Program

• develops and implements a supervisory plan informed by the financial and economic environment as well as firm-specific circumstances;
• conducts horizontal and firm-specific examinations and monitoring;
• assigns supervisory ratings;
• makes recommendations to the Board regarding enforcement actions with the concurrence of the Vice Chair for Supervision; and
• makes suggestions to the Director of Supervision and Regulation (S&R Director) regarding the recommendations that will be advanced to the Board, with the concurrence of the Vice Chair for Supervision, related to each LISCC firm's resolution plan and advises other supervisory portfolios on resolution and recovery matters.²

Currently, eight U.S. bank holding companies are included in the LISCC Program:³

• Bank of America Corporation
• The Bank of New York Mellon Corporation
• Citigroup Inc.
• The Goldman Sachs Group, Inc.
• JP Morgan Chase & Co.
• Morgan Stanley
• State Street Corporation
• Wells Fargo & Company

The list of firms subject to the LISCC Program is updated on the Board's website at https://www.federalreserve.gov/supervisionreg/large-institution-supervision.htm.

Footnotes