    [United States Government Manual]
    [June 02, 1998]
    [Pages 557-564]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    FEDERAL RESERVE SYSTEM

    Board of Governors of the Federal Reserve System

    Twentieth Street and Constitution Avenue NW., Washington, DC 20551
    Phone, 202-452-3000
    Board of Governors

    Chairman                                          Alan Greenspan
    Vice Chair                                        Alice M. Rivlin
    Members                                           Roger W. Ferguson,
                                                              Jr., Edward M.
                                                              Gramlich,
                                                              Edward W.
                                                              Kelley, Jr.,
                                                              Laurence H.
                                                              Meyer, Susan
                                                              M. Phillips
    Official Staff:

    Assistants to the Board                           Joseph R. Coyne,
                                                              Donald J.
                                                              Winn, Theodore
                                                              E. Allison
    General Counsel                                   J. Virgil Mattingly,
                                                              Jr.
    Secretary                                         William W. Wiles

    [[Page 558]]

        Deputy Secretary                              Jennifer J. Johnson
        Associate Secretary and Ombudsman             Barbara R. Lowrey
    Director, Division of Consumer and Community      Griffith L. Garwood
            Affairs
    Director, Division of Banking Supervision and     Richard Spillenkothen
            Regulation
    Director, Division of Monetary Affairs            Donald L. Kohn
        Deputy Director                               David E. Lindsey
    Director, Division of Research and Statistics     Michael J. Prell
        Deputy Directors                              Edward C. Ettin, David
                                                              J. Stockton
    Staff Director, Division of International         Edwin M. Truman
            Finance
        Senior Associate Directors                    Larry J. Promisel,
                                                              Charles J.
                                                              Siegman
    Staff Director, Office of Staff Director for      S. David Frost
            Management
    Director, Division of Information Resources       Stephen R. Malphrus
            Management
    Director, Division of Human Resources Management  David L. Shannon
        Associate Director                            John R. Weis
    Comptroller                                       George E. Livingston
    Director, Division of Support Services            Robert E. Frazier
    Director, Division of Federal Reserve Bank        Clyde H. Farnsworth,
            Operations and Payment Systems                    Jr.
        Deputy Director, Finance and Control          David L. Robinson
    Inspector General                                 Brent L. Bowen

    Officers of the Federal Reserve Banks

    Chairmen and Federal Reserve Agents:
        Atlanta                                       David R. Jones
        Boston                                        William C. Brainard
        Chicago                                       Lester H. McKeever,
                                                              Jr.
        Cleveland                                     G. Watts Humphrey, Jr.
        Dallas                                        Roger R. Hemminghaus
        Kansas City                                   Jo Marie Dancik
        Minneapolis                                   David A. Koch
        New York                                      John C. Whitehead
        Philadelphia                                  Joan Carter
        Richmond                                      Claudine B. Malone
        St. Louis                                     John F. McDonnell
        San Francisco                                 Gary G. Michael
    Presidents:
        Atlanta                                       Jack Guynn
        Boston                                        Cathy E. Minehan
        Chicago                                       Michael H. Moskow
        Cleveland                                     Jerry L. Jordan
        Dallas                                        Robert D. McTeer, Jr.
        Kansas City                                   Thomas M. Hoenig
        Minneapolis                                   Gary H. Stern
        New York                                      William J. McDonough
        Philadelphia                                  Edward G. Boehne
        Richmond                                      J. Alfred Broaddus,
                                                              Jr.
        St. Louis                                     William Poole
        San Francisco                                 Robert T. Parry

    [[Page 559]]

    Federal Open Market Committee
        Chairman                                      Alan Greenspan
        Vice Chairman                                 William J. McDonough
        Members                                       Roger W. Ferguson,
                                                              Jr., Edward M.
                                                              Gramlich,
                                                              Thomas M.
                                                              Hoenig, Jerry
                                                              L. Jordan,
                                                              Edward W.
                                                              Kelley, Jr.,
                                                              Laurence H.
                                                              Meyer, Cathy
                                                              E. Minehan,
                                                              Susan M.
                                                              Phillips,
                                                              Alice M.
                                                              Rivlin, (1
                                                              vacancy)
        Official Staff:
        Secretary and Economist                       Donald L. Kohn
            Deputy Secretary                          Normand R.V. Bernard
        Assistant Secretaries                         Joseph R. Coyne, Gary
                                                              P. Gillum
        General Counsel                               J. Virgil Mattingly,
                                                              Jr.
            Deputy General Counsel                    Thomas C. Baxter, Jr.
        Economists                                    Michael J. Prell,
                                                              Edwin M.
                                                              Truman
            Manager, System Open Market               Peter R. Fisher
                    Account
        Co-Secretaries, Federal Advisory              James Annable, William
                Council                                       J. Korsvik
        Chairman, Consumer Advisory Council           Julia W. Seward
        President, Thrift Institutions                David F. Holland
                Advisory Council

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    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 established by the Federal Reserve Act
    (12 U.S.C. 221), approved December 23, 1913. The System serves as the
    Nation's central bank. As such, its major responsibility is in the
    execution of monetary policy. It also performs other functions, such as
    the transfer of funds, handling Government deposits and debt issues,
    supervising and regulating banks, and acting as lender of last resort.
        It is the responsibility of the Federal Reserve System to contribute
    to the strength and vitality of the U.S. economy. By influencing the
    lending and investing activities of depository institutions and the cost
    and availability of money and credit, the Federal Reserve System helps
    promote the full use of human and capital resources, the growth of
    productivity, relatively stable prices, and equilibrium in the Nation's
    international balance of payments. Through its supervisory and
    regulatory banking functions, the Federal Reserve System helps maintain
    a commercial banking system that is responsive to the Nation's financial
    needs and objectives.
        The System consists of seven parts: the Board of Governors in
    Washington, DC; the 12 Federal Reserve Banks and their 25 branches and
    other facilities situated throughout the country; the Federal Open
    Market Committee; the Federal Advisory Council; the Consumer Advisory
    Council; the Thrift Institutions Advisory Council; and the Nation's
    financial institutions, including commercial banks, savings and loan
    associations, mutual savings banks, and credit unions.

    Board of Governors

    Broad supervisory powers are vested in the Board of Governors, which has
    its offices in Washington, DC. The Board is composed of seven members
    appointed by the President with the advice and consent of the Senate.
    The Chairman of the Board of Governors is, by Executive Order 11269 of
    February 14, 1966, a member of the National Advisory

    [[Page 560]]

    Council on International Monetary and Financial Policies.
        The Board determines general monetary, credit, and operating
    policies for the System as a whole and formulates the rules and
    regulations necessary to carry out the purposes of the Federal Reserve
    Act. The Board's principal duties consist of monitoring credit
    conditions; supervising the Federal Reserve Banks, member banks, and
    bank holding companies; and regulating the implementation of certain
    consumer credit protection laws.
    Power To Influence Credit Conditions  Pursuant to the Depository
    Institutions Deregulation and Monetary Control Act of 1980, referred to
    as the Monetary Control Act of 1980 (12 U.S.C. 226 note), the Board is
    given the power, within statutory limitations, to fix the requirements
    concerning reserves to be maintained by depository institutions on
    transaction accounts or nonpersonal time deposits. Another important
    instrument of credit control is found in open market operations. The
    members of the Board of Governors also are members of the Federal Open
    Market Committee, whose work and organization are described in the
    following text. The Board of Governors reviews and determines the
    discount rate charged by the Federal Reserve Banks. For the purpose of
    preventing excessive use of credit for the purchase or carrying of
    securities, the Board is authorized to regulate the amount of credit
    that may be initially extended and subsequently maintained on any
    security (with certain exceptions).
    Supervision of Federal Reserve Banks  The Board is authorized to make
    examinations of the Federal Reserve Banks, to require statements and
    reports from such Banks, to supervise the issue and retirement of
    Federal Reserve notes, to require the establishment or discontinuance of
    branches of Reserve Banks, and to exercise supervision over all
    relationships and transactions of those Banks with foreign branches. The
    Board of Governors reviews and follows the examination and supervisory
    activities of the Federal Reserve Banks aimed at further coordination of
    policies and practices.
    Supervision of Bank Holding Companies  The Bank Holding Company Act of
    1956 (12 U.S.C. 1841 et seq.) gave the Federal Reserve primary
    responsibility for supervising and regulating the activities of bank
    holding companies. This act was designed to achieve two basic
    objectives: to control the expansion of bank holding companies by
    avoiding the creation of monopoly or restraining trade in banking; and
    to limit the expansion of bank holding companies to those nonbanking
    activities that are closely related to banking, thus maintaining a
    separation between banking and commerce. A company that seeks to become
    a bank holding company must obtain the prior approval of the Federal
    Reserve. Any company that qualifies as a bank holding company must
    register with the Federal Reserve System and file reports with the
    System.
    Supervision of Banking Organizations  The Federal Reserve is responsible
    for the supervision and regulation of domestic and international
    activities of U.S. banking organizations. It supervises State-chartered
    banks that are members of the System, all bank holding companies, and
    Edge Act and agreement corporations (corporations chartered to engage in
    international banking). In 1991, Congress expanded the Federal Reserve's
    supervisory authority over the U.S. activities of all foreign banking
    organizations.
        The Board has jurisdiction over the admission of State banks and
    trust companies to membership in the Federal Reserve System, the
    termination of membership of such banks, the establishment of branches
    by such banks, and the approval of bank mergers and consolidations where
    the resulting institution will be a State member bank. It receives
    copies of condition reports submitted by them to the Federal Reserve
    Banks. It has power to examine all member banks and the affiliates of
    member banks and to require condition reports from them. It has
    authority to require periodic and other public disclosure of information
    with respect to

    [[Page 561]]

    an equity security of a State member bank that is held by 500 or more
    persons. It establishes minimum standards with respect to installation,
    maintenance, and operation of security devices and procedures by State
    member banks. Also, it has authority to issue cease-and-desist orders in
    connection with violations of law or unsafe or unsound banking practices
    by State member banks and to remove directors or officers of such banks
    in certain circumstances, and it may, in its discretion, suspend member
    banks from the use of the credit facilities of the Federal Reserve
    System for making undue use of bank credit for speculative purposes or
    for any other purpose inconsistent with the maintenance of sound credit
    conditions.
        The Board may grant authority to member banks to establish branches
    in foreign countries or dependencies or insular possessions of the
    United States, to invest in the stocks of banks or corporations engaged
    in international or foreign banking, or to invest in foreign banks. It
    also charters, regulates, and supervises certain corporations that
    engage in foreign or international banking and financial activities.
        The Board is authorized to issue general regulations permitting
    interlocking relationships in certain circumstances between member banks
    and organizations dealing in securities or between member banks and
    other banks.
    Other Activities  Under the Change in Bank Control Act of 1978 (12
    U.S.C. 1817(j)), the Board is required to review other bank stock
    acquisitions.
        Under the Truth in Lending Act (15 U.S.C. 1601), the Board is
    required to prescribe regulations to ensure a meaningful disclosure by
    lenders of credit terms so that consumers will be able to compare more
    readily the various credit terms available and will be informed about
    rules governing credit cards, including their potential liability for
    unauthorized use.
        Under the International Banking Act of 1978 (12 U.S.C. 3101), the
    Board has authority to impose reserve requirements and interest rate
    ceilings on branches and agencies of foreign banks in the United States,
    to grant loans to them, to provide them access to Federal Reserve
    services, and to limit their interstate banking activities.
        The Board also is the rulemaking authority for the Equal Credit
    Opportunity Act, the Home Mortgage Disclosure Act, the Fair Credit
    Billing Act, the Expedited Funds Availability Act, and certain
    provisions of the Federal Trade Commission Act as they apply to banks.
    Expenses  To meet its expenses and pay the salaries of its members and
    its employees, the Board makes semiannual assessments upon the Reserve
    Banks in proportion to their capital stock and surplus.

    Federal Open Market Committee

    The Federal Open Market Committee is comprised of the Board of Governors
    and five of the presidents of the Reserve Banks. The Chairman of the
    Board of Governors is traditionally the Chairman of the Committee. The
    president of the Federal Reserve Bank of New York serves as a permanent
    member of the Committee. Four of the twelve Reserve Bank presidents
    rotate annually as members of the Committee.
        Open market operations of the Reserve Banks are conducted under
    regulations adopted by the Committee and pursuant to specific policy
    directives issued by the Committee, which meets in Washington at
    frequent intervals. Purchases and sales of securities in the open market
    are undertaken to supply bank reserves to support the credit and money
    needed for long-term economic growth, to offset cyclical economic
    swings, and to accommodate seasonal demands of businesses and consumers
    for money and credit. These operations are carried out principally in
    U.S. Government obligations, but they also include purchases and sales
    of Federal agency obligations. All operations are conducted in New York,
    where the primary markets for these securities are located; the Federal
    Reserve Bank of New York executes transactions for the Federal Reserve
    System Open Market Account in carrying out these operations.

    [[Page 562]]

        Under the Committee's direction, the Federal Reserve Bank of New
    York also undertakes transactions in foreign currencies for the Federal
    Reserve System Open Market Account. The purposes of these operations
    include helping to safeguard the value of the dollar in international
    exchange markets and facilitating growth in international liquidity in
    accordance with the needs of an expanding world economy.

    Federal Reserve Banks

    The 12 Federal Reserve Banks are located in Atlanta, Boston, Chicago,
    Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia,
    Richmond, San Francisco, and St. Louis. Branch banks are located in
    Baltimore, Birmingham, Buffalo, Charlotte, Cincinnati, Denver, Detroit,
    El Paso, Helena, Houston, Jacksonville, Little Rock, Los Angeles,
    Louisville, Memphis, Miami, Nashville, New Orleans, Oklahoma City,
    Omaha, Pittsburgh, Portland, Salt Lake City, San Antonio, and Seattle.
    Directors and Officers of Reserve Banks  The Board of Directors of each
    Reserve Bank is composed of nine members, equally divided into three
    designated classes: class A, class B, and class C. Directors of class A
    are representative of the stockholding member banks. Directors of class
    B must be actively engaged in their districts in commerce, agriculture,
    or some other industrial pursuit, and may not be officers, directors, or
    employees of any bank. Class C directors may not be officers, directors,
    employees, or stockholders of any bank. The six class A and class B
    directors are elected by the stockholding member banks, while the three
    class C directors are appointed by the Board of Governors. The terms of
    office of the directors are so arranged that the term of one director of
    each class expires each year.
        One of the class C directors appointed by the Board of Governors is
    designated as Chairman of the Board of Directors of the Reserve Bank and
    as Federal Reserve agent, and in the latter capacity he is required to
    maintain a local office of the Board of Governors on the premises of the
    Reserve Bank. Another class C director is appointed by the Board of
    Governors as deputy chairman. Each Reserve Bank has as its chief
    executive officer a president appointed for a term of 5 years by its
    Board of Directors with the approval of the Board of Governors.
    Reserves on Deposit  In accordance with provisions of the Monetary
    Control Act of 1980 (12 U.S.C. 226 note), the Reserve Banks receive and
    hold on deposit the reserve or clearing account deposits of depository
    institutions. These banks are permitted to count their vault cash as
    part of their required reserve.
    Extensions of Credit  The Monetary Control Act of 1980 (12 U.S.C. 226
    note) directs the Federal Reserve to open its discount window to any
    depository institution that is subject to Federal Reserve reserve
    requirements on transaction accounts or nonpersonal time deposits.
        Discount window credit provides for Federal Reserve lending to
    eligible depository institutions under two basic programs. One is the
    adjustment credit program; the other supplies more extended credit for
    certain limited purposes.
        Short-term adjustment credit is the primary type of Federal Reserve
    credit. It is available to help borrowers meet temporary requirements
    for funds. Borrowers are not permitted to use adjustment credit to take
    advantage of any spread between the discount rate and market rates.
        Extended credit is provided through three programs designed to
    assist depository institutions in meeting longer term needs for funds.
    One provides seasonal credit--for periods running up to 9 months--to
    smaller depository institutions that lack access to market funds. A
    second program assists institutions that experience special difficulties
    arising from exceptional circumstances or practices involving only that
    institution. Finally, in cases where more general liquidity strains are
    affecting a broad range of depository institutions--such as those whose
    portfolios consist primarily of longer term assets--credit may be
    provided to

    [[Page 563]]

    address the problems of particular institutions being affected by the
    general situation.
    Currency Issue  The Reserve Banks issue Federal Reserve notes, which
    constitute the bulk of money in circulation. These notes are obligations
    of the United States and are a prior lien upon the assets of the issuing
    Federal Reserve Bank. They are issued against a pledge by the Reserve
    Bank with the Federal Reserve agent of collateral security including
    gold certificates, paper discounted or purchased by the Bank, and direct
    obligations of the United States.
    Other Powers  The Reserve Banks are empowered to act as clearinghouses
    and as collecting agents for depository institutions in the collection
    of checks and other instruments. They are also authorized to act as
    depositories and fiscal agents of the United States and to exercise
    other banking functions specified in the Federal Reserve Act. They
    perform a number of important functions in connection with the issue and
    redemption of United States Government securities.

    Federal Advisory Council

    The Federal Advisory Council acts in an advisory capacity, conferring
    with the Board of Governors on general business conditions.
        The Council is composed of 12 members, one from each Federal Reserve
    district, being selected annually by the Board of Directors of the
    Reserve Bank of the district. The Council is required to meet in
    Washington, DC, at least four times each year, and more often if called
    by the Board of Governors.

    Consumer Advisory Council

    The Consumer Advisory Council confers with the Board of Governors
    several times each year on the Board's responsibilities for many of the
    consumer credit protection laws. The Council was established by Congress
    in 1976 at the suggestion of the Board and replaced the Advisory
    Committee on Truth in Lending that was established by the 1968 Truth in
    Lending Act.
        The 30 Council members represent the interests of consumers,
    community groups, and creditors nationwide. They advise the Board on its
    responsibilities under such laws as Truth in Lending, Equal Credit
    Opportunity, and Home Mortgage Disclosure.

    Thrift Institutions Advisory Council

    The Thrift Institutions Advisory Council is an advisory group
    established by the Board in 1980 made up of representatives from nonbank
    depository thrift institutions, which includes savings and loans, mutual
    savings bankers, and credit unions. The Council meets at least four
    times each year with the Board of Governors to discuss developments
    relating to thrift institutions, the housing industry and mortgage
    finance, and certain regulatory issues.

    Sources of Information

    Employment  Written inquiries regarding employment should be addressed
    to the Director, Division of Personnel, Board of Governors of the
    Federal Reserve System, Washington, DC 20551.
    Procurement  Firms seeking business with the Board should address their
    inquiries to the Director, Division of Support Services, Board of
    Governors of the Federal Reserve System, Washington, DC 20551.
    Publications  Among the publications issued by the Board are The Federal
    Reserve System--Purposes and Functions, and a series of pamphlets
    including Guide to Business Credit and the Equal Credit Opportunity Act;
    Consumer Handbook; Making Deposits: When Will Your Money Be Available;
    and When Your Home Is On the Line: What You Should Know About Home
    Equity Lines of Credit. Copies of these pamphlets are available free of
    charge. Information regarding publications may be obtained in Room MP-
    510 (Martin Building) of the Board's headquarters. Phone, 202-452-3244.
    Reading Room  A reading room where persons may inspect records that are

    [[Page 564]]

    available to the public is located in Room B-1122 at the Board's
    headquarters, Twentieth Street and Constitution Avenue NW., Washington,
    DC. Information regarding the availability of records may be obtained by
    calling 202-452-3684.

    For further information, contact the Office of Public Affairs, Board of
    Governors, Federal Reserve System, Washington, DC 20551. Phone, 202-452-
    3204 or 202-452-3215.

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