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The U.S. Federal Reserve announced that it is publishing its final guidance for novel financial institutions to access its “master accounts.”
The Federal Reserve released formal guidelines to oversee the process by which “institutions offering new types of financial products or with novel charters” could be granted so-called “master accounts,” a key financial status that allows for direct payments with, and access to, the Fed.
In a statement, Fed Vice Chair Lael Brainard said, "The new guidelines provide a consistent and transparent process to evaluate requests for Federal Reserve accounts and access to payment services in order to support a safe, inclusive, and innovative payment system."
Under the guidance, Tier 1 banks would be federally insured. Tier 2 banks would not be federally insured but are still “subject to prudential supervision by a federal banking agency.”
The third tier consists of firms that are “not federally insured and not subject to prudential supervision by a federal banking agency.”
Source - Federal Reserve
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