- On behalf of the Federal Reserve System,
the Federal Reserve Bank of New York offers banking
and financial services to about 250 central banks,
governments and international official institutions.
- The New York Fed offers payment, custody
and safekeeping, and investment services to its
customers.
- Most of the assets held in foreign official
accounts are in the form of U.S. Treasury and agency
securities. These accounts also hold a large quantity
of foreign monetary gold at the New York Fed.
Overview
The New York Fed offers banking and financial services
to about 250 central banks, governments and international
official institutions on behalf of the Federal Reserve
System. These consist of payment services, custodial services
for securities and gold, and investment services. The Bank
offers other services on an occasional basis, such as technical
assistance and training for central bankers. The wide-ranging
services the New York Fed offers to official international
account holders have led the Bank to play a significant
role in the worldwide financial system.
Payment Services
Foreign official account holders pay out and receive funds
via the Federal Reserve's Funds Transfer System, commonly
referred to as Fedwire®. For incoming payments, foreign
and international account holders receive funds from
correspondents through the Fedwire® Funds Service.
For outgoing payments, customers send us payment instructions
by authenticated SWIFT, and we execute payments through
Fedwire®.
Account holders can also send U.S. currency to the Bank for deposit to their
accounts. The customer’s account is credited with the amount of currency
received. When central banks need U.S. currency and do not have a private arrangement
in place for obtaining the currency, the New York Fed can assist its account
holders to arrange the shipment of banknotes. The customer's account is charged
for the amount of currency provided.
The New York Fed will, at a customer’s
request, execute transactions for the purchase and sale of certain non-dollar
currencies in the U.S. foreign-exchange market. In such transactions, the Bank
acts as agent for its customers. These purchases and sales are not considered
to be U.S. foreign exchange intervention, nor are they intended to reflect
any policy initiative of the U.S. monetary authorities.
Custodial and Safekeeping Services
Most of the assets held in custody at the Bank in international official accounts
are in the form of marketable U.S. government and agency securities. The New
York Fed provides custodial services, including principal and interest payments,
for Fedwire®-eligible securities, as well as for some non-Fedwire® securities
through an arrangement with the Depository Trust and Clearing Corporation (DTCC)
for eligible customers. The Bank also provides clearing and settlement services
for customers’ securities transactions.
In addition to holding U.S. dollar-denominated
assets, the New York Fed provides vault facilities to central banks and international
official institutions for the deposit and safekeeping of gold. The Bank keeps
the identity of all account holders to which vault services are provided confidential.
Investments
The New York Fed invests funds in money-market instruments on behalf of central
bank and international official account holders. Investments may be in overnight
repurchase agreements or U.S. Treasury and government-sponsored entity agency
securities. The Bank can purchase and sell securities on a customer’s
behalf according to the customer’s pre-determined standing instructions,
or as requested on an individual basis. Customer instructions must specify
the type of securities the account holder wants to buy. The Federal Reserve
does not give investment advice.
Other Services
On a less frequent basis, the New York Fed provides other services to central
banks and international official institutions. One of the services is an annual
central banking seminar, which consists of a series of group discussions and
lectures at the Bank on topics such as bank supervision, monetary policy implementation
and portfolio management.
The New York Fed also provides onsite technical assistance to a requesting
central bank in a variety of areas relating to central bank operations. This
assistance ranges from how to implement new technology to how to run bank examinations.
May 2010 |
