Federal Reserve Board: Democratic Members of Congress Write Letter to Board–Lack of Diversity Adversely Affects Policymaking

This blog has covered several posts about the Board of Governors of the Federal Reserve System (Board), specifically about its unjust and myopic policymaking as well as its mistreatment of African American employees. The topic of this post is a recent Congressional letter to the Board (May 12, 2016).

Some Democratic Members of Congress–Senators and Representatives– wrote to the Chair of the Board, Janet Yellen, to inform Yellen and the Board of their concerns. Chief among them is the concern that the lack of diversity ill affects policymaking of the Federal Open Market Committee (FOMC). The congressional letter writers noted that the membership of the FOMC is 100% white.

A former member of the FOMC, former president of the Federal Reserve Bank of Minneapolis, Narayana Kocherlakota, stated the following observation in his blog–that the effect of race on economic policy was never discussed–particularly the high rate of unemployment among African Americans.

“Reflecting on his experience on the FOMC in a recent blog post, former Minneapolis Federal Reserve President Narayana Kocherlakota wrote: “There is one key source of economic difference in American life that is likely underemphasized in FOMC deliberations: race.”6   He reviewed the most recent full year of FOMC meeting transcripts available (2010), and found that “there was no reference in the meetings to labor market conditions among African-Americans,” although the unemployment rate for African-Americans never dropped below 15.5 percent during that year.7 It is unacceptable that discussion of the job market for these populations would be an afterthought, or worse, ignored entirely, and we are concerned that the lack of balanced representation may be a significant cause of this oversight.”

6 Narayana Kocherlakota , “MLK Day Reflection s on the FOMC,” (blog post) Narayna Kocherlakota’s Website, January 18, 2016, https://sites.google.com/site/kocherlakota009/home/policy/thoughts-on-policy/1-18-16.

7 Id.

I now summarize the remainder of the congressional letter writers concerns–

  • The Board’s failure to ensure its leadership reflects the composition of the nation, including occupational diversity.
  • When the Board reappointed the presidents of the Federal Reserve Banks, it was done without public consultation and limited transparency regarding the metrics and criteria used to evaluate the presidents’ performance or the decision to reappoint them.
  • The letter writers also request that the FOMC consider the interests and priorities of those who have not benefitted from the economic recovery. [Author’s note: It should be mentioned that Congress can act to address concerns about unemployment through fiscal policy.]

Federal Reserve Board: H.2 Release for Week Ending May 14, 2016; H.4.1 Release (Balance Sheet) for Week Ending May 19, 2016

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending May 14, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Forms Forms — initial Board review to extend without revision the Report of Selected Balance Sheet Items for Discount Window Borrowers (FR 2046) and to extend with revision the Payments Research Survey (FR 3067).

-Proposed, May 9, 2016

 

Forms — final Board review to extend without revision the Written Security Program for State Member Banks (FR 4004) and the Risk-Based Capital Guidelines: Market Risk (FR 4201).

-Approved, May 13, 2016

 

 

Monetary and Financial Policy Term Deposit Facility — floating-rate offering of seven-day term deposits with an early withdrawal feature, same-day settlement, and a maximum tender amount of $5 billion on May 19, 2016.

-Announced, May 12, 2016

 

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for May 19, 2016, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of May 18, 2016): $4,519,301 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: H.2 Release for Week Ending May 7, 2016; H.4.1 Release (Balance Sheet) for Week Ending May 12, 2016

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending May 7, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Bank Branches, Domestic Origin Bank, Choudrant, Louisiana — to establish a branch at 2049 West Gray Street, Houston, Texas, and a mobile branch to serve Harris County, Texas.

-Approved, May 4, 2016

 

 

 

Bank Holding Companies Republic Bancorp, Inc., Louisville, Kentucky — to merge with Cornerstone Bancorp, Inc., St. Petersburg, Florida, and thereby indirectly acquire Cornerstone Community Bank.

-Approved, May 2, 2016

 

Personnel Division of Banking Supervision and Regulation — appointment of James Ray Diggs as assistant director.

-Announced, May 5, 2016

 

Regulations and Policies Regulation WW (Liquidity Risk Measurement Standards) — publication for comment of interagency proposed rule to implement a stable funding requirement, the net stable funding ratio, for large and internationally active banking organizations.

-Approved, May 3, 2016

 

Regulations Q, WW, and YY — publication for comment of proposed rule to implement restrictions on qualified financial contracts of systemically important U.S. banking organizations and the U.S. operations of systemically important foreign banking organizations.

-Approved, May 3, 2016

 

Enforcement Farmers & Merchants Bank of Ashland, Ashland, Nebraska — issuance of a consent order of assessment of a civil money penalty.

-Announced, May 3, 2016

First Mutual of Richmond, Inc., Richmond, Indiana, and Richmond Mutual Bancorporation, Inc. — written agreement dated June 29, 2012, terminated April 28, 2016.

-Announced, May 3, 2016

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for May 12, 2016, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of May 11, 2016): $4,524,027 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: D.C. Circuit Affirmed Dismissal of Employment Discrimination Case, Artis v. (Greenspan) (Bernanke) Yellen

On April 1, 2016, the District of Columbia Circuit Court of Appeals issued a mandate of its December 21, 2015, order, which summarily affirmed the dismissal of the appellants’ appeal. The court determined that the record was replete with examples of appellants’ misconduct at the district court level.

The circuit judges on the panel were Brett Kavanaugh, Cornelia Pillard, and Robert Wilkins.

(Docket number 15-5260, available at www.pacer.gov).

Thus ends this shamefully long case to fight against the complainants in the initial stages of a so-called Equal Employment Opportunity counseling session.

One thing is certain, Board employees should read this case and, in case of any issue, consult legal counsel first, and be wary of the Board’s complaint mechanisms (unless there are sufficient reforms).

Eighteen years for this case to arrive at a messy and incomplete end. The whole affair scars the Board’s credibility; the Board is worthy of further Congressional oversight. In addition, the Board should never again have the latitude to put forward such lengthy, expensive litigation without approval.

President Barack Obama: Wonderful Advice Provided to Howard University Students and People Living in the United States

Over the years, this blog has covered some of the speeches of President Barack Obama given to black audiences. The blog author took exception to them because without fail the President used the opportunity to lash black people under the guise of being of assistance. Mentions of good things would be negated with withering criticism.

With this in my mind, when the President announced that he was to give a commencement address at another HBCU–Howard University in Washington, D.C.–I was skeptical as to what the President would do with such an opportunity.

To my great relief and delight, the President’s speech was exceptional–personal and fatherly. Even the critiques were in the tone of offering not only an alternative view but also a constructive way forward.

I recommend reading this speech in its entirety (video available at http://www.whur.com/podcasts/webcasts/howard-university-commencement-2016/ (as of the date of writing of this post)), but I will provide some of the speech’s broad points.

  • Be confident in your heritage and blackness. (It is always nice to hear people affirm one’s identity positively, especially from a President who shares that identity.)
  • Black people have to be aware of injustice, unfairness, and struggle, for black people and for other vulnerable populations, including white people who also suffer from the backlash of the recession.
  • There is a need for a passion for change and also a strategy of achieving that change. In addition, people have to vote consistently. (Without question, turnout should be near 100%)
  • Change requires more than speaking but also listening to those with whom you disagree. In discussions about change be open to compromise–a compromise that may fall short of the absolute expectation but gets the process started toward that expectation (as its goal).
    • (This is the blog author’s interpretation of this section.) [In terms of people coming to colleges to speak with disagreeable views, students should attend such talks in a respectful manner, but also take notes and use the speech to fuel further research. Should research lead to questions, write a letter, blog post, column to the university student paper about it. I will say a well-formed letter assists the writer with learning but also adds to the debate and refutation of error. These talks should be seen as an opportunity for growth.]

Federal Reserve Board: H.2 Release for Week Ending April 30, 2016; H.4.1 Release (Balance Sheet) for Week Ending May 5, 2016

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 30, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Board Operations Office of Financial Stability Policy and Research (OFS) — organizational realignment to recognize OFS as an operating division of the Board, and redesignation as the Division of Financial Stability.

-Approved, April 28, 2016

 

Forms Forms — final Board review to extend with revision the recordkeeping and disclosure requirements of the Truth in Lending Act (Reg Z).

-Approved, April 25, 2016

 

Forms — final Board review (1) to extend without revision the Reporting Requirements Associated with Regulation Y (Reg Y-1) and (2) to extend with revision the Uniform Application for Municipal Securities Principal or Municipal Securities Representative Associated with a Bank Municipal Securities Dealers (FR MSD-4) and Uniform Termination Notice for Municipal Securities Principal or Municipal Securities Representative Associated with a Bank Municipal Securities Dealer (FR MSD-5).

-Approved, April 28, 2016

 

Regulations and Policies Incentive-Based Compensation Requirements — publication for comment of a proposed interagency rule to implement the incentive-based compensation provisions of the Dodd-Frank Act.

-Approved, April 28, 2016

 

Enforcement Jack Henry & Associates, Inc., Monett, Missouri — written agreement dated December 4, 2013, terminated March 29, 2016.

-Announced, April 26, 2016

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for  May 5, 2016, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of May 4, 2016):  $4,522,821 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: H.2 Release for Week Ending April 23, 2016; H.4.1 Release (Balance Sheet) for Week Ending April 28, 2016

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 23, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Banks, State Member Frost Bank, San Antonio, Texas — commenter’s request for reconsideration of the Board’s approval of the proposal by Frost Bank to establish two branches.

-Denied, April 19, 2016

 

Forms Forms — final board review to extend without revision the Senior Credit Officer Opinion Survey on Dealer Financing Terms (FR 2034).

-Approved, April 19, 2016

 

Personnel Division of Reserve Bank Operations and Payment Systems — appointment of Matthew J. Eichner as director.

-Announced, April 21, 2016

 

Enforcement CommerceWest Bank, Irvine, California — issuance of a consent cease and desist order.

-Announced, April 19, 2016

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 28, 2016, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 27, 2016): $4,519,745 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)