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Central Bank ServicesBanking Supervision and RegulationThe Minneapolis Fed examines 92 state-chartered banks that are Fed members and 689 bank holding companies to determine their financial soundness and compliance with banking laws and regulations. TheMinneapolis Fed also processes applications to either establish new bank holding companies or expand existing bank holding companies.
Open Market OperationsOpen market operations are the Fed's primary tool for conducting monetary policy, actions to influence the availability and cost of money and credit. The Fed purchases U.S. government securities to inject funds into the economy and stimulate growth on money and credit; sales do the opposite. The Minneapolis Fed directly contributes to decisions on open market operations through its president's participation on the Federal Open Market Committee (FOMC), the organization within the Fed responsible for monetary policy. Minneapolis Fed President Gary Stern, or his representative, attends all FOMC meetings. One year out of every three he is a voting member of the FOMC (2002), along with four other Fed presidents and theseven-member Board of Governors. Primarily to assist the president in preparing for FOMC meetings, the Minneapolis Fed maintains an economic research department. Discount WindowAnother method by which the Fed can inject funds into the banking system is by lending funds to financial institutions through the discount window. The interest rate on these loans is called the discount rate. Twice a month the Minneapolis Fed's directors establish the Ninth District's discount rate, subject to the review and determination by the Board of Governors. Not only does the discount window contribute to the day-to-day implementation of monetary policy, it also serves as a safety valve to relieve temporary cash shortages at banks and other depository institutions. |
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Glossary
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Helena Branch
