Federal Reserve Discount Mechanism: Hearings, Ninetieth Congress, Second Session. September 11 and 17, 1968Considers Federal Reserve Board report on proposed revision of the Federal Reserve discount practices to meet changing banking needs. |
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adjustment credit announcement effect assets bank borrowing bankers banking system basic borrowing privilege Board of Governors central bank Chairman PROXMIRE changes commercial banks competitive CONGRESS THE LIBRARY deposits discount facilities discount rate discount window Fed's Federal funds market Federal Reserve Act Federal Reserve banks Federal Reserve Board Federal Reserve discount Federal Reserve System Friedman function GIES going Government securities Home Loan Bank housing industry impact increase interest rates Joint Economic Committee large banks last resort lender of last lending LIBRARY OF CONGRES LIBRARY OF CONGRESS liquidity loan associations Loan Bank Board market rates member banks ment monetary policy money market mortgage mutual savings banks needs open market operations penalty rate percent problem RARY OF CONGRESS rediscounting Representative BROCK Representative REUSS Reserve Discount Mechanism RITTER ROBERTSON savings and loan seasonal borrowing privilege September situation small banks statement subsidy tion
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Page 77 - Martin, hearings before the Committee on Banking and Currency, House of Representatives, on HR 16092, June 1968, p.
Page 3 - ... other than the Federal Reserve have expanded enormously. In addition, a small but growing number of banks has also been led to withdraw from membership in the Federal Reserve System, chiefly in order to avoid reserve requirements and thus enable them to invest a greater portion of their resources in earning assets. In view of these developments, the proposed redesign of the discount mechanism is aimed at relating Federal Reserve lending more clearly and closely to the changing banking and community...
Page 5 - ... member banks, nor should total access be so liberal as to interfere with Federal Reserve openmarket operations aimed at carrying out national credit policy objectives. Borrowing within the basic borrowing privilege limitations could, as noted, take place virtually upon request, unless the Reserve bank had notified the member bank that its overall condition was unsatisfactory as determined by such factors as adequacy of capital, liquidity, soundness, management, or noncompliance with law or regulation...
Page 7 - The proposal redesign of the discount window would provide that the Federal Reserve continue to supply liberal help to its member banks in emergency situations. So long as the member bank is solvent and steps are being taken to find a solution to its problems, credit would be available on the same basis as it currently is, and, within the limits of the law, special and flexible arrangements would continue to be made where necessary. Assisting a bank in an emergency situation would generally require...
Page 1 - FEBRUABY 6, 1967 CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC The joint committee met at 10 :05 am, pursuant to recess, in room S-228, the Capitol, Hon.
Page 54 - ... is that Congress is very sensitive about the argument that the executive has moved in and taken over virtually all the authority and power of our Federal Government now, getting more and more all the time, and Congress is not doing the job it should do. The only real power that Congress has left is the power of the purse, the power to tax and the power to spend. To give that to the executive, what is left ? Another point is that supposing that President Johnson had had the power to increase taxes...
Page 69 - These include comments from the American Bankers Association, the Independent Bankers Association of America, and the United States Savings & Loan League.
Page 6 - In addition, the redesigned window recognizes, and provides for, the necessity that — in its role as lender of last resort to other sectors of the economy — the Federal Reserve stands ready, under extreme conditions, to provide circumscribed credit assistance to a broader spectrum of financial institutions than member banks
Page 6 - The 90-day maximum is imposed by statute; however, should the need extend over a longer period than this, the reserve banks would regard renewals of credit as in accordance with the initial seasonal credit negotiation. Seasonal credit needs would normally be expected to last for several months, but in exceptional cases could range up to us much as 9 months, we believe. Seasonal credit obtainable at a reserve bank would be limited to the amount of the borrowing bank's seasonal swing in excess of a...
Page 8 - ... that, even after any of the suggested changes were introduced, a period of transition would undoubtedly be required before the full potential of the discount mechanism could be realized either by the Federal Reserve or the member banks. However, I believe that there is a good possibility that this redesign can bring this mechanism in closer touch with the prevailing economic climate and lead to a more effectively functioning banking system that is better equipped to serve evolving needs of the...