Louis is one of twelve such banks which, with the Board of Governors, make up the Federal Reserve System. The St. Louis Bank operates in the Eighth Federal Reserve District, which encompasses all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee. In addition to the head office in St. Louis, the Bank has branches in Little Rock, Louisville, and Memphis. The functions of the Federal Reserve System include the formulation and implementation of monetary

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... , the regulation of banks, and the provision of services to banks, the U.S. Government, and the general public. The day-to-day operations of the Federal Reserve Banks consist primarily of the regulatory and service functions. This report reviews these operations for the Federal Reserve Bank of St. Louis during 1973. Bank Supervision and Regulation The Federal Reserve System has responsibility for the supervision and regulation of state-chartered banks which are members of the Federal Reserve System. Nonmember state banks which are insured by the Federal Deposit Insurance Corporation (FDIC) are supervised by that agency as well as state officials. National banks, although required to be members of the Federal Reserve System, are under the jurisdiction of the Comptroller of the Currency. One of the regulatory actions of the Federal Reserve Banks is the processing of applications from state-chartered banks for membership in the Federal Reserve System. New branches of state member banks also must be approved by the Reserve Bait. An important part of the Federal Reserve System's continuing supervision of banks is the annual examination of state member banks which the twelve Reserve Banks conduct in their districts. The purpose of the examinations is to evaluate each bank's assets, liabilities, capital, liquidity, operations, and management, and to determine compliance with applicable laws and regulations. The Bank Supervision and Regulation Department of the Federal Reserve Bank of St. Louis examined 91 banks during 1973. The Federal Reserve System also has responsibility for administering the Bank Holding Company Act. The responsibility of the Reserve Banks includes the analysis of applications both for establishing bank holding companies and for acquiring additional banks and bank-related firms. In addition, supervision of the bank holding companies is performed by the Reserve Banks. At the end of 1973, the Federal Reserve Bank of St. Louis had jurisdiction over 17 multi-bank holding companies and 67 one-bank holding companies. The Bank Supervision and Regulation, Legal, and Research Departments of the Federal Reserve Bank of St. Louis are involved in processing the bank holding company applications. Factors analyzed in connection with these applications include the financial conditions and managerial capabilities of the relevant companies, the effects on competition expected to result from the proposal, and likely effects on the convenience and needs of the areas involved. Under certain circumstances the Federal Reserve Bank possesses delegated authority to approve applications. In most cases the recommendations of the Federal Reserve Bank are forwarded to the Board of Governors of the Federal Reserve System for the final decision.