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FEDERAL RESERVE SYSTEM Board of Governors of the Federal Reserve System Twentieth Street and Constitution Avenue NW., Washington, DC 20551 Phone, 202–452–3000

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FEDERAL RESERVE SYSTEM Board of Governors of the Federal Reserve System Twentieth Street and Constitution Avenue NW., Washington, DC 20551 Phone, 202–452–3000 420 U.S. GOVERNMENT MANUAL FEDERAL RESERVE SYSTEM Board of Governors of the Federal Reserve System Twentieth Street and Constitution Avenue NW., Washington, DC 20551 Phone, 202–452–3000. Internet, www.federalreserve.gov. Board of Governors Chairman ALAN GREENSPAN Vice Chair ROGER W. FERGUSON, JR. Members EDWARD M. GRAMLICH, SUSAN SCHMIDT BIES, MARK W. OLSON, BEN S. BERNANKE, DONALD L. KOHN Staff: Assistants to the Board WINTHROP P. HAMBLEY, MICHELLE A. SMITH General Counsel J. VIRGIL MATTINGLY, JR. Secretary JENNIFER J. JOHNSON Director, Division of Banking Supervision and RICHARD SPILLENKOTHEN Regulation Director, Division of Consumer and DOLORES S. SMITH Community Affairs Director, Division of Federal Reserve Bank LOUISE L. ROSEMAN Operations and Payment Systems Director, Division of Information Resources MARIANNE M. EMERSON Management Director, Division of International Finance KAREN H. JOHNSON Director, Management Division H. FAY PETERS, Acting Director, Division of Monetary Affairs VINCENT R. REINHART Director, Division of Research and Statistics DAVID J. STOCKTON Staff Director, Office of Staff Director for STEPHEN R. MALPHRUS Management Inspector General BARRY R. SNYDER Officers of the Federal Reserve Banks Chairmen and Federal Reserve Agents: Atlanta, GA DAVID M. RATCLIFFE Boston, MA SAMUEL O. THIER Chicago, IL W. JAMES FARRELL Cleveland, OH ROBERT W. MAHONEY Dallas, TX RAY L. HUNT Kansas City, MO RICHARD H. BARD Minneapolis, MN LINDA HALL WHITMAN New York, NY JOHN E. SEXTON Philadelphia, PA RONALD J. NAPLES Richmond, VA WESLEY S. WILLIAMS, JR. St. Louis, MO WALTER L. METCALFE, JR. San Francisco, CA GEORGE M. SCALISE Presidents: Atlanta, GA JACK GUYNN Boston, MA CATHY E. MINEHAN Chicago, IL MICHAEL H. MOSKOW Cleveland, OH SANDRA PIANALTO Dallas, TX ROBERT D. MCTEER, JR. VerDate Dec 13 2002 15:22 Jul 29, 2004 Jkt 198805 PO 00000 Frm 00428 Fmt 6997 Sfmt 6995 D:\NARA\198805.062 APPS06 PsN: 198805 FEDERAL RESERVE SYSTEM 421 Kansas City, MO THOMAS M. HOENIG Minneapolis, MN GARY H. STERN New York, NY TIMOTHY F. GEITHNER Philadelphia, PA ANTHONY M. SANTOMERO Richmond, VA J. ALFRED BROADDUS, JR. St. Louis, MO WILLIAM POOLE San Francisco, CA ROBERT T. PARRY Federal Open Market Committee Chairman ALAN GREENSPAN Vice Chairman TIMOTHY F. GEITHNER Members SUSAN SCHMIDT BIES, BEN S. BERNANKE, ROGER W. FERGUSON, JR., EDWARD M. GRAMLICH, THOMAS M. HOENIG, DONALD L. KOHN, CATHY E. MINEHAN, MARK W. OLSON, SANDRA PIANALTO, WILLIAM POOLE Staff: Secretary and Economist VINCENT R. REINHART Deputy Secretary NORMAND R. V. BERNARD Assistant Secretary MICHELLE A. SMITH General Counsel J. VIRGIL MATTINGLY, JR. Economists KAREN H. JOHNSON, DAVID J. STOCKTON Federal Advisory Councils: Co-Secretaries, Federal Advisory Council JAMES ANNABLE, WILLIAM J. KORSVIK Chairman, Consumer Advisory Council AGNES BUNDY SCANLAN President, Thrift Institutions Advisory Council WILLIAM J. SMALL The Federal Reserve System, the central bank of the United States, is charged with administering and formulating the Nation’s credit and monetary policy. Through its supervisory and regulatory banking functions, the Federal Reserve maintains the safety and soundness of the Nation’s economy, responding to the Nation’s domestic and international financial needs and objectives. The Federal Reserve System was System helps promote the full use of established by the Federal Reserve Act human and capital resources, the growth (12 U.S.C. 221), approved December 23, of productivity, relatively stable prices, 1913. The System serves as the Nation’s and equilibrium in the Nation’s central bank. As such, its major international balance of payments. responsibility is in the execution of Through its supervisory and regulatory monetary policy. It also performs other banking functions, the Federal Reserve functions, such as the transfer of funds, System helps maintain a commercial handling Government deposits and debt banking system that is responsive to the issues, supervising and regulating banks, Nation’s financial needs and objectives. and acting as lender of last resort. The System consists of the Board of It is the responsibility of the Federal Governors in Washington, DC; the 12 Reserve System to contribute to the Federal Reserve Banks and their 25 strength and vitality of the U.S. branches and other facilities situated economy. By influencing the lending throughout the country; the Federal and investing activities of depository Open Market Committee; the Federal institutions and the cost and availability Advisory Council; the Consumer of money and credit, the Federal Reserve Advisory Council; the Thrift Institutions VerDate Dec 13 2002 15:22 Jul 29, 2004 Jkt 198805 PO 00000 Frm 00429 Fmt 6997 Sfmt 6995 D:\NARA\198805.062 APPS06 PsN: 198805 422 U.S. GOVERNMENT MANUAL Advisory Council; and the Nation’s responsibility for supervising and financial institutions, including regulating the activities of bank holding commercial banks, savings and loan companies. The main objectives of this associations, mutual savings banks, and activity are to control the expansion of credit unions. bank holding companies by avoiding the creation of monopoly or restraining trade Board of Governors in banking, and to limit the expansion of The Board is composed of seven bank holding companies to those members appointed by the President nonbanking activities that are closely with the advice and consent of the related to banking, thus maintaining a Senate. The Chairman of the Board of separation between banking and Governors is a member of the National commerce. A company that seeks to Advisory Council on International become a bank holding company must Monetary and Financial Policies. The obtain the prior approval of the Federal Board determines general monetary, Reserve. Any company that qualifies as a credit, and operating policies for the bank holding company must register System as a whole and formulates the with the Federal Reserve System and file rules and regulations necessary to carry reports with the System. out the purposes of the Federal Reserve Supervision of Banking Organizations Act. The Board’s principal duties consist The Federal Reserve is responsible for of monitoring credit conditions; the supervision and regulation of supervising the Federal Reserve Banks, domestic and international activities of member banks, and bank holding U.S. banking organizations. It supervises companies; and regulating the State-chartered banks that are members implementation of certain consumer of the System, all bank holding credit protection laws. companies, and Edge Act and agreement Power To Influence Credit Conditions corporations (corporations chartered to The Board has the power, within engage in international banking). The Board has jurisdiction over the statutory limitations, to fix the admission of State banks and trust requirements concerning reserves to be companies to membership in the Federal maintained by depository institutions on Reserve System, the termination of transaction accounts or nonpersonal time membership of such banks, the deposits. The Board of Governors establishment of branches by such reviews and determines the discount rate banks, and the approval of bank mergers charged by the Federal Reserve Banks. and consolidations where the resulting For the purpose of preventing excessive institution will be a State member bank. use of credit for the purchase or carrying It receives copies of condition reports of securities, the Board is authorized to submitted to the Federal Reserve Banks. regulate the amount of credit that may It has power to examine all member be initially extended and subsequently banks and the affiliates of member banks maintained on any security (with certain and to require condition reports from exceptions). them. It has authority to require periodic Supervision of Federal Reserve Banks and other public disclosure of The Board is authorized to make information with respect to an equity examinations of the Federal Reserve security of a State member bank that is Banks, to require statements and reports held by 500 or more persons. It from such Banks, to supervise the issue establishes minimum standards with and retirement of Federal Reserve notes, respect to installation, maintenance, and to require the establishment or operation of security devices and discontinuance of branches of Reserve procedures by State member banks. Banks, and to exercise supervision over Also, it has authority to issue cease-and- all relationships and transactions of those desist orders in connection with Banks with foreign branches. violations of law or unsafe or unsound Supervision of Bank Holding Companies banking practices by State member The Federal Reserve has primary banks and to remove directors or officers VerDate Dec 13 2002 15:22 Jul 29, 2004 Jkt 198805 PO 00000 Frm 00430 Fmt 6997 Sfmt 6995 D:\NARA\198805.062 APPS06 PsN: 198805 FEDERAL RESERVE SYSTEM 423 of such banks in certain circumstances, Open market operations of the and it may suspend member banks from Reserve Banks are conducted under the use of the credit facilities of the regulations adopted by the Committee Federal Reserve System for making and pursuant to specific policy directives undue use of bank credit for speculative issued by the Committee, which meets purposes or for any other purpose in Washington at frequent intervals. inconsistent with the maintenance of Purchases and sales of securities in the sound credit conditions. open market are undertaken to supply The Board may grant authority to bank reserves
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