§263 — Title 12 Banks and Banking | U.S. Code

Summary

Creates the Federal Open Market Committee made up of the Board of Governors and five Reserve Bank representatives. The five must be presidents or first vice presidents of Reserve Banks. They are elected every year, starting with the term that began March 1, 1943. One is chosen by New York’s board; the others by groups of regional boards (Boston/Philadelphia/Richmond; Cleveland/Chicago; Atlanta/Dallas/St. Louis; Minneapolis/Kansas City/San Francisco). Each board gets one vote. An alternate is elected the same way. The Committee meets in Washington at least four times a year, called by the Board chair or any three members. Federal Reserve banks must follow the Committee’s directions and rules for open-market operations. The Committee makes and sends those rules. When buying or selling eligible paper, the timing, type, and amount must aim to help commerce and consider the country’s overall credit situation.

Title 12, §263

Banks and Banking — Source: USLM XML via OLRC

(a)There is hereby created a Federal Open Market Committee (hereinafter referred to as the “Committee”), which shall consist of the members of the Board of Governors of the Federal Reserve System and five representatives of the Federal Reserve banks to be selected as hereinafter provided. Such representatives shall be presidents or first vice presidents of Federal Reserve banks and, beginning with the election for the term commencing March 1, 1943, shall be elected annually as follows: One by the board of directors of the Federal Reserve Bank of New York, one by the boards of directors of the Federal Reserve Banks of Boston, Philadelphia, and Richmond, one by the boards of directors of the Federal Reserve Banks of Cleveland and Chicago, one by the boards of directors of the Federal Reserve Banks of Atlanta, Dallas, and St. Louis, and one by the boards of directors of the Federal Reserve Banks of Minneapolis, Kansas City, and San Francisco. In such elections each board of directors shall have one vote; and the details of such elections may be governed by regulations prescribed by the committee, which may be amended from time to time. An alternate to serve in the absence of each such representative shall likewise be a president or first vice president of a Federal Reserve bank and shall be elected annually in the same manner. The meetings of said Committee shall be held at Washington, District of Columbia, at least four times each year upon the call of the chairman of the Board of Governors of the Federal Reserve System or at the request of any three members of the Committee.

(b)No Federal Reserve bank shall engage or decline to engage in open-market operations under section 348a and 353 to 359 of this title except in accordance with the direction of and regulations adopted by the Committee. The Committee shall consider, adopt, and transmit to the several Federal Reserve banks, regulations relating to the open-market transactions of such banks.

(c)The time, character, and volume of all purchases and sales of paper described in section 348a and 353 to 359 of this title as eligible for open-market operations shall be governed with a view to accommodating commerce and business and with regard to their bearing upon the general credit situation of the country.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1942—Subsec. (a). Act July 7, 1942, substituted second, third, and fourth sentences for former second and third sentences. 1935—Act Aug. 23, 1935, amended provisions relating to membership in subsec. (a), substituted “Committee” for “Federal Reserve Board” and “Board” in subsec. (b), and omitted subsec. (d).

§263 Federal Open Market Committee; Creation; Membership; Regulations Governing Open-market Transactions

Summary

Title 12, §263

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata