12 U.S.C. § 263 — Federal Open Market Committee; creation; membership; regulations governing open-market transactions

submitted 113 years ago by ch. 6 to r/title-12-BANKS-AND-BANKING · 386 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law creates the Federal Open Market Committee from Board members and five elected regional bank presidents. Reserve Banks can only trade in the open market under the Committee's direction and regulations. The Committee must guide the timing, type, and amount of trades to support commerce and stable credit conditions.

(a) This section creates the Federal Open Market Committee ("the Committee"). It consists of all the members of the Board of Governors of the Federal Reserve System, plus five representatives from the regional Federal Reserve banks. These five must be presidents or first vice presidents of Federal Reserve banks. Starting with the term beginning March 1, 1943, they are elected every year as follows: the board of directors of the Federal Reserve Bank of New York elects one; the boards of the Federal Reserve Banks of Boston, Philadelphia, and Richmond together elect one; the boards of the Federal Reserve Banks of Cleveland and Chicago together elect one; the boards of the Federal Reserve Banks of Atlanta, Dallas, and St. Louis together elect one; and the boards of the Federal Reserve Banks of Minneapolis, Kansas City, and San Francisco together elect one. In each of these elections, every board of directors gets one vote, and the Committee may write (and later amend) regulations governing the details of the elections. Each representative also gets an alternate — also a president or first vice president of a Federal Reserve bank — elected annually the same way. The Committee must meet in Washington, D.C. at least four times a year, called either by the chairman of the Board of Governors or by any three members of the Committee. (b) No Federal Reserve bank may engage in, or refuse to engage in, open-market operations under sections 348a and 353 to 359 of this title except as the Committee directs and regulates. The Committee must consider, adopt, and send to the several Federal Reserve banks regulations governing their open-market transactions. (c) The timing, type, and volume of all purchases and sales of the paper described in sections 348a and 353 to 359 of this title (the paper eligible for open-market operations) must be managed with a view toward accommodating commerce and business, and with regard to their effect on the country's overall credit situation.

the actual law source: uscode.house.gov ↗public domain

(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 sections 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 sections 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.

Source credit: (Dec. 23, 1913, ch. 6, § 12A, as added June 16, 1933, ch. 89, § 8, 48 Stat. 168; amended Aug. 23, 1935, ch. 614, title II, § 205, 49 Stat. 705; July 7, 1942, ch. 488, § 1, 56 Stat. 647.)

history & why it existsrecord from the source credit

1913Enacted · Act of Dec. 23, 1913, ch. 6 · 48 Stat. 168
1935Amended · Act of Aug. 23, 1935, ch. 614 · 49 Stat. 705
1942Amended · Act of July 7, 1942, ch. 488 · 56 Stat. 647

A history note hasn’t been published yet. The record shows enactment by ch. 6 on 1913-12-23.

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