§358 Establishment of accounts for purposes of open-market operations; correspondents and agencies

Summary

Federal Reserve banks can open accounts at other Federal Reserve banks to handle exchanges. With the Federal Reserve Board’s approval and under its rules, a Federal Reserve bank may open accounts in other countries, hire foreign correspondents, and set up agencies to buy, sell, and collect bills of exchange from real commercial deals. Those bills must have no more than 90 days left to run (not counting days of grace) and must be signed by two or more responsible parties. The bank may buy or sell those bills with or without endorsing them. With the Board’s consent, a Federal Reserve bank may also open foreign banking accounts for those correspondents, for foreign banks or bankers, or for foreign states. If one Federal Reserve bank opens such an account or agency with Board approval, the Board can allow other Federal Reserve banks to use that account or agency to do the same kinds of transactions under the Board’s rules.