The big bank
The Federal Reserve Bank of New York is the
largest of the 12 regional banks in the Federal Reserve System. The
system acts as the central bank for the United States, and is
responsible for regulating the flow of money by setting interest
rates, overseeing the regulation of the banking industry and
providing banking services to the federal government. The FRBNY
does not operate individual accounts.
In November 2003, Timothy F. Geithner became
the bank's President and CEO. Prior to the appointment, Geithner
served as director of the Policy Development and Review Department
in the International Monetary Fund of Washington, D.C., and served
as Under Secretary of the Treasury for International Affairs.
Getting a grip
The FRB was established by President Woodrow
Wilson in 1913 in response to the need for more government control
over the economy; by creating an institution to manipulate interest
rates, the FRB provided a powerful measure of control over the flow
of money. As a concession to populist opponents, the FRB was set up
in a decentralized structure, with each of the 12 regional banks
having its own board of directors, drawn from local commercial
leaders and a member list of private banks. The regional banks
opened in 1914. The boards of directors are nominated by their
member banks; the boards, in turn, elect the president.
But what does it do?
The New York Fed, though small in geographic
territory (it covers New York State, 12 counties in New Jersey,
Fairfield County in Connecticut, Puerto Rico and the Virgin
Islands), is the largest of the banks in terms of volume and
assets--indeed, the Bank's New York City headquarters holds
billions of dollars in gold and securities in its vault (the bank
also has a branch in Buffalo and local offices in Utica and East
Rutherford, N.J.). Alongside the monetary and regulatory duties
shared among all regional banks, the New York Fed also has unique
responsibilities: open-market operations, intervening in foreign
exchange markets, and storing gold for foreign governments and
international agencies. In fact, the New York Fed offers its
banking and financial services to over 200 foreign central banks,
foreign governments, and international official institutions.
Additionally, the New York Fed's president is the only regional
Bank president with a permanent vote on the Federal Open Market