Federal Reserve Bank of New York
|Federal Reserve Bank of New York|
|Headquarters||New York, NY|
|Products||Gold reserves; Input into domestic monetary policy|
The Federal Reserve Bank of New York is one of 12 regional Reserve Banks which, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. While it serves a geographically small area compared with those of other Federal Reserve Banks, the New York Fed is the largest Reserve Bank in terms of assets and volume of activity.
In June 2012, Simon Potter, an internal director of economic research, was chosen to replace Brian Sack as the new head of its division that conducts monetary policy in the marketplace for the U.S. central bank. The markets group, which deals directly with Wall Street and foreign central banks, carries out Fed actions in the open market. Potter will oversee the extension of Operation Twist.
Jurisdiction and Responsibilities
The New York Fed has supervisory jurisdiction over the Second Federal Reserve District, which encompasses New York state, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico and the U.S. Virgin Islands.
The Federal Reserve Bank of New York has the only regional Bank president with a permanent vote on the Federal Open Market Committee and this individual is traditionally selected as its vice chairman. Other presidents serve one-year terms on a rotating basis.
The Federal Open Market Committee is responsible for formulating and executing monetary policy. The Federal Reserve System is responsible for supervising and regulating depository institutions, and for providing an elastic currency. The Federal Reserve Bank of New York assists in the federal government's financing operations, and serves as the banker for the U.S. Treasury Department.
In addition, it has important roles in operating the nation's payments systems, protecting consumers' rights in their dealings with banks and promoting community development and reinvestment.
The size of the bank to be established in New York was a highly contentious issue. The city's financiers, such as J.P. Morgan, had argued that the New York Fed should be an area of focus so that it would receive due recognition from the central banks of Europe.
The New York Fed opened for business under the leadership of Benjamin Strong Jr., previously president of the Bankers Trust Company, on Nov. 16, 1914. The original staff consisted of seven officers and 85 clerks, many who were on loan from local banks.
The bank began receiving its gold during the World Wars when foreign countries wanted their gold reserves safely away from European turmoil. It now has enormous gold reserves which are five floors beneath the city streets and 30 feet under the subway system. The lower section of the building sits in the granite bedrock that makes up the foundation of Manhattan.
Only about two percent of the 9,000 tons of gold the Federal Reserve Bank of New York stores (worth a little under $120 billion) belong to the United States. There are 63 account holders there, 49 of which are countries; the rest belong to international organizations.