§263 Federal Open Market Committee; creation; membership; regulations governing open-market transactions

Summary

Creates a Federal Open Market Committee made up of the Board of Governors of the Federal Reserve and five bank representatives. The five must be presidents or first vice presidents of Federal Reserve banks. Starting with the election for the term beginning March 1, 1943, one representative is chosen by the New York Fed board; one by the Boston, Philadelphia, and Richmond boards together; one by the Cleveland and Chicago boards together; one by the Atlanta, Dallas, and St. Louis boards together; and one by the Minneapolis, Kansas City, and San Francisco boards together. Each board has one vote. Each representative has an alternate chosen the same way. The committee sets rules for these elections and can change them. Meetings are in Washington, D.C., at least four times a year, called by the Board chair or by any three committee members. Federal Reserve banks may only do open-market operations under sections 348a and 353 to 359 when following the Committee’s directions and rules. The Committee must make and send those rules to the banks. When buying or selling eligible paper under those sections, the timing, type, and amount must aim to help commerce and business and must consider the nation’s overall credit situation.