[United States Government Manual]
[June 01, 1999]
[Pages 551-558]
[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

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Members                                           Roger W. Ferguson, 
                                                          Jr., Edward M. 
                                                          Gramlich, 
                                                          Edward W. 
                                                          Kelley, Jr., 
                                                          Laurence H. 
                                                          Meyer, 
                                                          (vacancy)
Official Staff:                                     

Assistants to the Board                           Lynn S. Fox, Donald J. 
                                                          Winn
General Counsel                                   J. Virgil Mattingly, 
                                                          Jr.
Secretary                                         Jennifer J. Johnson
    Associate Secretary                           Robert D. Frierson
    Associate Secretary and Ombudsman             Barbara R. Lowrey
Director, Division of Consumer and Community      Dolores S. Smith
        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
Director, Division of International Finance       Karen H. Johnson
    Deputy Directors                              Lewis S. Alexander, 
                                                          Peter Hooper
Staff Director, Office of Staff Director for      S. David Frost
        Management
Director, Division of Information Resources       Stephen R. Malphrus
        Management
Director, Management Division                     S. David Frost
Director, Division of Support Services            Robert E. Frazier
Director, Division of Federal Reserve Bank        Clyde H. Farnsworth, 
        Operations and Payment Systems                    Jr.
Inspector General                                 Barry R. Snyder

Officers of the Federal Reserve Banks               

Chairmen and Federal Reserve Agents:                
    Atlanta                                       John F. Wieland
    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                                     Susan S. Elliott
    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.

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    St. Louis                                     William Poole
    San Francisco                                 Robert T. Parry

Federal Open Market Committee                       

    Chairman                                      Alan Greenspan
    Vice Chairman                                 William J. McDonough
    Members                                       Edward G. Boehne, 
                                                          Roger W. 
                                                          Ferguson, Jr., 
                                                          Edward M. 
                                                          Gramlich, 
                                                          Edward W. 
                                                          Kelley, Jr., 
                                                          Robert D. 
                                                          McTeer, Jr., 
                                                          Laurence H. 
                                                          Meyer, Michael 
                                                          H. Moskow, 
                                                          Alice M. 
                                                          Rivlin, Gary 
                                                          H. Stern, 
                                                          (vacancy)

    Official Staff:                                 

    Secretary and Economist                       Donald L. Kohn
        Deputy Secretary                          Normand R.V. Bernard
    Assistant Secretaries                         Lynn S. Fox, Gary P. 
                                                          Gillum
    General Counsel                               J. Virgil Mattingly, 
                                                          Jr.
        Deputy General Counsel                    Thomas C. Baxter, Jr.
    Economists                                    Karen H. Johnson, 
                                                          Michael J. 
                                                          Prell
        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

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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 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

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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 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

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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.
    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

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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 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;

[[Page 558]]

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 
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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