The Federal Reserve System Purposes & Functions
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The Federal Reserve Act of 1913
THE FEDERAL RESERVE ACT OF 1913 HISTORY AND DIGEST by V. GILMORE IDEN PUBLISHED BY THE NATIONAL BANK NEWS PHILADELPHIA Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Copyright, 1914 by Ccrtttiois Bator Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis History of Federal Reserve Act History N MONDAY, October 21, 1907, the Na O tional Bank of Commerce of New York City announced its refusal to clear for the Knickerbocker Trust Company of the same city. The trust company had deposits amounting to $62,000,000. The next day, following a run of three hours, the Knickerbocker Trust Company paid out $8,000,000 and then suspended. One immediate result was that banks, acting independently, held on tight to the cash they had in their vaults, and money went to a premium. Ac cording to the experts who investigated the situation, this panic was purely a bankers’ panic and due entirely to our system of banking, which bases the protection of the financial solidity of the country upon the individual reserves of banks. In the case of a stress, such as in 1907, the banks fail to act as a whole, their first consideration being the protec tion of their own reserves. PAGE 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis History of Federal Reserve Act The conditions surrounding previous panics were entirely different. -
Observations on Regulation D and the Use of Reserve Requirements
United States Government Accountability Office Report to Congressional Requesters October 2016 FEDERAL RESERVE Observations on Regulation D and the Use of Reserve Requirements GAO-17-117 October 2016 FEDERAL RESERVE Observations on Regulation D and the Use of Reserve Requirements Highlights of GAO-17-117, a report to congressional requesters Why GAO Did This Study What GAO Found Section 19 of the Federal Reserve Act The methods by which depository institutions can implement Regulation D requires depository institutions to (Reserve Requirements of Depository Institutions) include maintaining reserves maintain reserves against a portion of against transaction accounts and enforcing a numeric transfer and withdrawal their transaction accounts solely for the (transaction) limit for savings deposits if they wish to avoid classifying those implementation of monetary policy. accounts as reservable transaction accounts. GAO estimates that 70–78 percent Regulation D implements section 19, of depository institutions limit savings deposit transactions. Other methods and it also requires institutions to limit include automatically transferring balances from transaction (e.g., checking) certain kinds of transfers and accounts to savings deposits in order to reduce reserve requirements. Institutions withdrawals from savings deposits to may choose to maintain transaction account reserves against savings deposits to not more than six per month or eliminate the need to enforce the transaction limit. But some institutions GAO statement cycle if they wish to avoid having to maintain reserves against surveyed indicated that they had operational burdens associated with monitoring these accounts. The transaction limit and enforcing the transaction limit (for example, 63–73 percent cited challenges, allows the Federal Reserve to such as creating forms and converting and closing accounts). -
About the Richmond
regulates banks that have a national charter, and can Who appoints the Board of Governors? usually be recognized by the word “National” in or the The seven members, called governors, are appointed by letters “N.A.” after their names. On July 21, 2011, the U.S. president and are confirmed by the U.S. Senate for supervisory responsibility for federal savings and loans staggered 14-year terms. and federal savings banks switched to the Office of the Comptroller of the Currency. Who leads the Board of Governors? • The National Credit Union Administration regulates • The Board of Governors is led by a chair and a vice chair, federally chartered credit unions. who serve four-year terms. About the • States also have supervisory responsibility for • The chair and vice chair are nominated by the president state-chartered banks and credit unions, as well as and confirmed by the Senate. Richmond Fed other non-depository institutions, such as consumer • The current chair is Jerome Powell and the vice chair is finance companies, mortgage lenders and brokers, Stanley Fischer. payday lenders, and check cashers. What is the Fed doing to promote accountability Do people have accounts at the Federal Reserve? and transparency? No, they do not. We’re a “banker’s bank.” Only depository • The Fed is ultimately accountable to the American institutions and certain other financial entities are eligible people, and regularly provides information to the to have accounts at a Federal Reserve Bank. public so people better understand what we do. • The Federal Reserve Board chair reports to Congress twice a year on the health of the economy and the actions of the FOMC. -
Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received
Federal Reserve Release H.2 Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received No. 22 Week Ending June 1, 2019 Board of Governors of the Federal Reserve System, Washington, DC 20551 H.2 Board Actions May 26, 2019 to June 1, 2019 Forms Forms -- initial Board review to extend with revision the Federal Reserve Membership Applications (FR 2083A and FR 2083B) and Federal Reserve Bank Stock Applications (FR 2030, FR 2030a, FR 2056, FR 2086, FR 2086a, and FR 2087) and to extend without revision two Federal Reserve Membership Applications (FR 2083 and FR 2083C). - Proposed, May 30, 2019 Personnel Division of Supervision and Regulation -- appointment of Mona Elliot as deputy associate director and Christine Graham as assistant director. - Announced, May 31, 2019 Management Division -- appointment of Winona H. Varnon as director and Michell Clark as senior adviser. - Approved, May 30, 2019 Regulations and Policies Liquidity Coverage Ratio (LCR) -- interagency final rule to modify the LCR rule to treat certain municipal obligations as high-quality liquid assets, in accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act. - Approved, May 23, 2019 (A/C) (A/C) = Addition or Correction Board - Page 1 of 1 H.2 Actions under delegated authority May 26, 2019 to June 1, 2019 S&R Supervision and Regulation RBOPS Reserve Bank Operations and Payment Systems C&CA Consumer and Community Affairs IF International Finance FOMC Federal Open Market Committee MA Monetary Affairs Bank Branches, Domestic San Francisco First Utah Bank, Salt Lake City, Utah -- to establish a branch at Village of Traverse Mountain, 3600 North Digital Drive, Lehi. -
Minutes of the Federal Open Market Committee April 27–28, 2021
_____________________________________________________________________________________________Page 1 Minutes of the Federal Open Market Committee April 27–28, 2021 A joint meeting of the Federal Open Market Committee Ann E. Misback, Secretary, Office of the Secretary, and the Board of Governors was held by videoconfer- Board of Governors ence on Tuesday, April 27, 2021, at 9:30 a.m. and con- tinued on Wednesday, April 28, 2021, at 9:00 a.m.1 Matthew J. Eichner,2 Director, Division of Reserve Bank Operations and Payment Systems, Board of PRESENT: Governors; Michael S. Gibson, Director, Division Jerome H. Powell, Chair of Supervision and Regulation, Board of John C. Williams, Vice Chair Governors; Andreas Lehnert, Director, Division of Thomas I. Barkin Financial Stability, Board of Governors Raphael W. Bostic Michelle W. Bowman Sally Davies, Deputy Director, Division of Lael Brainard International Finance, Board of Governors Richard H. Clarida Mary C. Daly Jon Faust, Senior Special Adviser to the Chair, Division Charles L. Evans of Board Members, Board of Governors Randal K. Quarles Christopher J. Waller Joshua Gallin, Special Adviser to the Chair, Division of Board Members, Board of Governors James Bullard, Esther L. George, Naureen Hassan, Loretta J. Mester, and Eric Rosengren, Alternate William F. Bassett, Antulio N. Bomfim, Wendy E. Members of the Federal Open Market Committee Dunn, Burcu Duygan-Bump, Jane E. Ihrig, Kurt F. Lewis, and Chiara Scotti, Special Advisers to the Patrick Harker, Robert S. Kaplan, and Neel Kashkari, Board, Division of Board Members, Board of Presidents of the Federal Reserve Banks of Governors Philadelphia, Dallas, and Minneapolis, respectively Carol C. Bertaut, Senior Associate Director, Division James A. -
Recent Monetary Policy in the US
Loyola University Chicago Loyola eCommons School of Business: Faculty Publications and Other Works Faculty Publications 6-2005 Recent Monetary Policy in the U.S.: Risk Management of Asset Bubbles Anastasios G. Malliaris Loyola University Chicago, [email protected] Marc D. Hayford Loyola University Chicago, [email protected] Follow this and additional works at: https://ecommons.luc.edu/business_facpubs Part of the Business Commons Author Manuscript This is a pre-publication author manuscript of the final, published article. Recommended Citation Malliaris, Anastasios G. and Hayford, Marc D.. Recent Monetary Policy in the U.S.: Risk Management of Asset Bubbles. The Journal of Economic Asymmetries, 2, 1: 25-39, 2005. Retrieved from Loyola eCommons, School of Business: Faculty Publications and Other Works, http://dx.doi.org/10.1016/ j.jeca.2005.01.002 This Article is brought to you for free and open access by the Faculty Publications at Loyola eCommons. It has been accepted for inclusion in School of Business: Faculty Publications and Other Works by an authorized administrator of Loyola eCommons. For more information, please contact [email protected]. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License. © Elsevier B. V. 2005 Recent Monetary Policy in the U.S.: Risk Management of Asset Bubbles Marc D. Hayford Loyola University Chicago A.G. Malliaris1 Loyola University Chicago Abstract: Recently Chairman Greenspan (2003 and 2004) has discussed a risk management approach to the implementation of monetary policy. This paper explores the economic environment of the 1990s and the policy dilemmas the Fed faced given the stock boom from the mid to late 1990s to after the bust in 2000-2001. -
Gramm-Leach Bliley Financial Privacy Rule
17980 Federal Register / Vol. 73, No. 64 / Wednesday, April 2, 2008 / Notices bank holding company and all of the (BHC Act), Regulation Y (12 CFR Part ACTION: Notice. banks and nonbanking companies 225), and all other applicable statutes owned by the bank holding company, and regulations to become a bank SUMMARY: The information collection including the companies listed below. holding company and/or to acquire the requirements described below will be The applications listed below, as well assets or the ownership of, control of, or submitted to the Office of Management as other related filings required by the the power to vote shares of a bank or and Budget (‘‘OMB’’) for review, as Board, are available for immediate bank holding company and all of the required by the Paperwork Reduction inspection at the Federal Reserve Bank banks and nonbanking companies Act (‘‘PRA’’). The FTC is seeking public indicated. The application also will be owned by the bank holding company, comments on its proposal to extend available for inspection at the offices of including the companies listed below. through July 31, 2011, the current PRA the Board of Governors. Interested The applications listed below, as well clearance for information collection persons may express their views in as other related filings required by the requirements contained in the writing on the standards enumerated in Board, are available for immediate Commission’s Gramm-Leach-Bliley the BHC Act (12 U.S.C. 1842(c)). If the inspection at the Federal Reserve Bank Financial Privacy Rule (‘‘GLB Privacy proposal also involves the acquisition of indicated. -
U.S. Policy in the Bretton Woods Era I
54 I Allan H. Meltzer Allan H. Meltzer is a professor of political economy and public policy at Carnegie Mellon University and is a visiting scholar at the American Enterprise Institute. This paper; the fifth annual Homer Jones Memorial Lecture, was delivered at Washington University in St. Louis on April 8, 1991. Jeffrey Liang provided assistance in preparing this paper The views expressed in this paper are those of Mr Meltzer and do not necessarily reflect official positions of the Federal Reserve System or the Federal Reserve Bank of St. Louis. U.S. Policy in the Bretton Woods Era I T IS A SPECIAL PLEASURE for me to give world now rely on when they want to know the Homer Jones lecture before this distinguish- what has happened to monetary growth and ed audience, many of them Homer’s friends. the growth of other non-monetary aggregates. 1 am persuaded that the publication and wide I I first met Homer in 1964 when he invited me dissemination of these facts in the 1960s and to give a seminar at the Bank. At the time, I was 1970s did much more to get the monetarist case a visiting professor at the University of Chicago, accepted than we usually recognize. 1 don’t think I on leave from Carnegie-Mellon. Karl Brunner Homer was surprised at that outcome. He be- and I had just completed a study of the Federal lieved in the power of ideas, but he believed Reserve’s monetary policy operations for Con- that ideas were made powerful by their cor- gressman Patman’s House Banking Committee. -
Regulation D: Reserve Requirements of Depository Institutions
FEDERAL RESERVE SYSTEM 12 CFR Part 204 Docket No. R-1737; RIN 7100-AG07 Regulation D: Reserve Requirements of Depository Institutions AGENCY: Board of Governors of the Federal Reserve System. ACTION: Notice of proposed rulemaking, request for public comment. SUMMARY: The Board of Governors of the Federal Reserve System (“Board”) proposes to amend its Regulation D (Reserve Requirements of Depository Institutions, 12 CFR Part 204) to eliminate references to an “interest on required reserves” rate and to an “interest on excess reserves” rate and replace them with a reference to a single “interest on reserve balances” rate. The Board also proposes to simplify the formula used to calculate the amount of interest paid on balances maintained by or on behalf of eligible institutions in master accounts at Federal Reserve Banks, and to make other conforming changes. DATES: Comments must be received on or before [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. ADDRESSES: You may submit comments, identified by Docket Number R-1737; RIN 7100-AG07, by any of the following methods: • Agency Web site: http://www.federalreserve.gov. Follow the instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm. 1 • E-mail: [email protected]. Include the docket number and RIN in the subject line of the message. • Fax: (202) 452-3819 or (202) 452-3102. • Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, NW, Washington, DC 20551. All public comments are available from the Board’s website at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, unless modified for technical reasons or to remove personally identifiable information at the commenter’s request. -
The Evolution of Fed Independence
FEDERALRESERVE The Evolution of Fed Independence BY STEPHEN SLIVINSKI oday there is a consensus Wars, Depression, and How monetary policy that a central bank can best Dependence T contribute to good economic When the United States entered and central bank performance by pursuing price stabil- World War I in April 1917, the Federal ity — and that it should remain inde- Reserve almost instantly became the autonomy came pendent from political forces. In the primary vehicle for financing the war case of price stability, this understand- effort. The main function of the Fed of age ing evolved over decades of experi- during those war years was to lend ence. The notion of independence of money to banks to purchase “Liberty the central bank was more difficult to Loans” bonds from the U.S. Treasury. fulfill. They loaned the money at a discount- The original conception of the ed rate — not coincidentally lower Federal Reserve System when it was than the interest rate on the war bonds created in 1913 was meant to continue — to entice bond purchasers. After the spirit of the “independent treasury the war, the Federal Reserve Bank of system” that existed in the pre-Fed New York remained the official era. That system assumed that the U.S. fiscal agent of the U.S. Treasury Treasury would store its gold and Department. assets in its own vaults lest it unduly In the post-war years, the Fed influence the markets for credit and busied itself with maintaining the money. Ideally, Treasury meddling in newly reconstructed gold standard. what passed for monetary policy at the Its missteps in the wake of the stock time was to be avoided. -
The Budgetary Status of the Federal Reserve System
A CBO Study The Budgetary Status of the February 1985 Federal Reserve System Congress ol the Un~tedStates - 4 Congress~onalBudget Ott~ce THE BUDGETARY STATUS OF THE FEDERAL RESERVE SYSTEM The Congress of the United States Congressional Budget Off ice -~ ~-~ NOTE The report includes budget data through calendar year 1983, the most recent data available when the report was prepared. PREFACE This report on the budgetary status of the Federal Reserve System was undertaken at the request of the Joint Economic Committee. The study describes the structure, activities, and financing of the Federal Reserve System, and reviews the history of the budgetary independence of the Sys- tem. It considers in detail two proposed alterations in the Federal Reserve's budgetary status: a complete presentation of Federal Reserve System finan- ces in the budget, and a requirement of prior appropriations for Federal Reserve System expenditures. The study does not examine in detail the Federal Reserve's determination and conduct of monetary policy. The study was prepared by Roy T. Meyers of the Budget Process Unit under the supervision of Richard P. Emery, Jr. David Delquadro, Mitchell Mutnick, and Marvin Phaup contributed material and valuable advice. Use- ful comments and suggestions were made by Valerie Amerkhail, Jacob Dreyer, Louis Fisher, Robert Hartman, Mary Maginniss, Marty Regalia, Stephen Swaim, Jean Wells, and John Woolley. Francis S. Pierce edited the manuscript. Paula Gatens prepared the manuscript for publication. Rudolph G. Penner Director February 1985 CONTENTS PREFACE ............................................. iii SUMMARY ............................................ xi CHAPTER I. INTRODUCTION ........................... CHAPTER I1. A HISTORY OF THE BUDGETARY INDEPENDENCE OF THE FEDERAL RESERVE SYSTEM .......... -
Information and Anti-American Attitudes
Federal Reserve Bank of New York Staff Reports Information and Anti-American Attitudes Adeline Delavande Basit Zafar Staff Report No. 558 April 2012 Revised September 2015 This paper presents preliminary findings and is being distributed to economists and other interested readers solely to stimulate discussion and elicit comments. The views expressed in this paper are those of the authors and are not necessarily reflective of views at the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors. Information and Anti-American Attitudes Adeline Delavande and Basit Zafar Federal Reserve Bank of New York Staff Reports, no. 558 April 2012; revised September 2015 JEL classification: D83, L80 Abstract This paper investigates how attitudes toward the United States are affected by the provision of information. We generate a panel of attitudes in urban Pakistan, in which respondents are randomly exposed to fact-based statements describing the United States in either a positive or negative light. Anti-American sentiment is high and heterogenous in our sample at the baseline, and systematically correlated with intended behavior, such as intended migration. We find that revised attitudes are, on average, significantly different from baseline attitudes: attitudes are revised upward (downward) upon receipt of positive (negative) information, indicating that providing information had a meaningful effect on U.S. favorability. There is, however, substantial heterogeneity in the revision of attitudes, with a substantial proportion of individuals not responding to the information. Nonrevisions are primarily a result of nonmalleability of attitudes. Revisions are driven by both saliency bias and information-based updating.