§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 Reserve banks. Starting with the term that begins March 1, 1943, they are chosen each year: one by the New York Fed board; one by the boards of Boston, Philadelphia, and Richmond; one by the boards of Cleveland and Chicago; one by the boards of Atlanta, Dallas, and St. Louis; and one by the boards of Minneapolis, Kansas City, and San Francisco. Each board has one vote. An alternate for each representative, also a president or first vice president, is elected the same way. The Committee meets in Washington, D.C., at least four times a year when called by the Board chair or at the request of any three members. Federal Reserve banks must follow the Committee’s directions and rules when doing open-market operations under sections 348a and 353 to 359. The Committee must create, approve, and send those rules to the Reserve banks. The timing, type, and amount of eligible purchases and sales must aim to help commerce and business and to consider their effect on the country’s overall credit situation.