Regional President Speech

1 Economic Symposium October 31 , 1991 Jefferson, Iowa I. WELCOME/INTRODUCTIONS A. WELCOME, l'M SILAS KEEHN, PRESIDENT OF THE FEDERAL RESERVE BANK OF CHICAGO. B. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1. VERY PLEASED TO BE HERE IN JEFFERSON. 2. DELIGHTED TO HAVE SUCH A MARVELOUS TURNOUT. THIS SESSION IS ONE OF A SERIES OF MEETINGS THAT WE'VE HELD THROUGHOUT THE MIDWEST TO DISCUSS THE ECONOMY AND MONETARY POLICY. 1. BUT WE HAVE SPECIAL REASON FOR BEING IN JEFFERSON--AS MANY OF YOU KNOW, WE SELECTED JEFFERSON AS THE SITE FOR THIS SESSION IN RECOGNITION OF MAX NAYLOR, WHO IS PRESIDENT OF NAYLOR FARMS HERE. ~~c, 2. MAX HAS MADE NUMEROUS TRIPS TO CHICAGO ON ,"\ OUR BEHALF AS A DIRECTOR OF OUR BANK FOR THE PAST SIX YEARS--ONLY FITTING FOR US TO COME TO JEFFERSON. 2 3. WILL HAVE A CHANCE TO SAY A FEW MORE WORDS ABOUT MAX'S CONTRIBUTIONS LATER. BUT SHOULD SAY NOW THAT CLEARLY MAX HAS DONE A TERRIFIC JOB IN HELPING US ORGANIZE THIS SESSION--THINK THE TURNOUT TODAY IS A REAL TRIBUTE TO HIM. C. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis LIKE TO TAKE A MOMENT TO INTRODUCE MY ASSOCIATES FROM THE BANK. 1. KARL SCH ELD, SENIOR VICE PRESIDENT AND DIRECTOR OF RESEARCH, WHO WILL BE TALKING TO YOU LATER IN THE PROGRAM. 2. GARY BENJAMIN, VICE PRESIDENT AND ECONOMIC ADVISOR IN OUR ECONOMIC RESEARCH DEPARTMENT, WHO IN A MOMENT WILL BE DISCUSSING AGRICULTURAL CONDITIONS. 3. ALSO FROM THE CHICAGO OFFICE, NANCY GOODMAN, VICE PRESIDENT IN CHARGE OF PUBLIC AFFAIRS, AND JOAN DERYCKE, ASSISTANT VICE PRESIDENT AND ASSISTANT SECRETARY. 3. ALSO WITH US IS EXAMINING OFFICER DEAN ROWLAND, IN CHARGE OF OUR TEAM OF EXAMINERS STATIONED IN IOWA; AND FINALLY FROM OUR _~ rf"' ~' 'ti-' 1, ~ " ~( ASSISTANT VICE PRESIDENT IN CHARGE OF THE \Yi 1/ :'<'.._ OFFICE, AND DICK JUNG, MANAGER OF THE / ~ ~ ir'lV ,, ~\ /l CUSTOMER SERVICES AT THE OFFICE. ~II. BRIEF BACKGROUND ON FEDERAL RESERVE SYSTEM. A. WE ARE ONE OF THE 12 FEDERAL RESERVE BANKS THAT, ALONG WITH THE BOARD OF GOVERNORS IN WASHINGTON, D.C., MAKE UP THE CENTRAL BANKING SYSTEM OF THE U.S. B. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis GEOGRAPHICALLY--12 DISTRICTS. 1. CHICAGO FED DISTRICT ENCOMPASSES 5 STATES-MOST OF ILLINOIS, INDIANA, MICHIGAN, WISCONSIN, AND ALL OF IOWA. 2. IN ADDITION TO HEAD OFFICE IN CHICAGO, HAVE A BRANCH IN DETROIT AND REGIONAL PROCESSING 4 OFFICES IN MILWAUKEE, INDIANAPOLIS, AND, AS l'VE ALREADY MENTIONED, DES MOINES C. D. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SEPARATE BANK--GOVERNMENT CORPORATION. 1. STOCK OWNED BY MEMBER BANKS. 2. SEPARATE BOARD OF DIRECTORS. BANK HAS 9 DIRECTORS--EACH DIRECTOR COMES FROM OUTSIDE THE FEDERAL RESERVE SYSTEM. 1. EGENERAL THE BANK, 2. 6 ELECTED BY MEMBER BANKS, 3 APPOINTED BY BOARD OF GOVERNORS IN WASHINGTON, D.C. 3. 3 DIRECTORS ELECTED BY MEMBER BANKS REPRESENT LARGE, SMALL AND MEDIUM-SIZED FINANCIAL INSTITUTIONS; REMAINING 6 DIRECTORS REPRESENT THE PUBLIC, INCLUDING SUCH SECTORS 5 AS CONSUMERS, INDUSTRY, LABOR, AND AGRICULTURE. E. DETROIT BRANCH HAS 7 DIRECTORS. 1. CHICAGO BOARD NAMES 4 DIRECTORS, REMAINING 3 APPOINTED BY BOARD OF GOVERNORS. ~~ F. /C/1_ <-- DIRECTORS ARE BASED THROUGHOUT THE DISTRICT; AFFILIATIONS COVER A RANGE OF IMPORTANT ECONOMIC SECTORS. 1. .'.If.J'-vJJ-l-- L,../4il~ ~ ,Le_(. ~1 WJ VERY IMPORTANT AND HELPFUL TO THEIR MONETARY POLICY ROLE. 2. DIRECTORS BRING REGIONAL PERSPECTIVE TO THE TABLE AND A GRASS-ROOTS, UP-TO-THE-MINUTE, INDEPENDENT ASSESSMENT OF THE BUSINESS OUTLOOK AND CREDIT CONDITIONS IN THE DISTRICT. G. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis HAVING SAID THAT, WOULD LIKE TO ACKNOWLEDGE THREE FORMER BOARD MEMBERS FROM IOWA; -JOHN SPIES (SPEEZE), PRESIDENT AND CHIEF EXECUTIVE OFFICER OF IOWA TRUST AND SAVINGS BANK IN EMMETSBURG; 6 -O.J. TOMSON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF FIRST CITIZENS FINANCIAL CORPORATION IN CHARLES CITY; AND -MARY GARST FROM COON RAPIDS, WHO WILL BE JOINING US LATER IN THE DAY; H. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ~'.s eJ't.J Tb 1i;! crAA..eJ,. ALSO IN THE INTERESTS OF PROVIDING REGIONAL INPUT, WE HAVE ESTABLISHED ADVISORY COUNCILS ON AGRICULTURE AND SMALL BUSINESS. 1. MEMBERS ARE NOMINATED BY AGRICULTURAL AND SMALL BUSINESS ORGANIZATIONS THROUGHOUT THE DISTRICT. 2. COUNCILS GIVE US INSIGHT INTO THE ACTIVITIES OF THESE VERY IMPORTANT SECTORS OF THE REGIONAL ECONOMY. 3. HAPPY TO SAY WE HAVE A NUMBER OF PAST AND PRESENT MEMBERS OF OUR ADVISORY COUNCIL ON ~ AGRICULTURE FROM IOWA WITH US TODAY: 'FHQlltttS -- .. DORR, MALCOM MCGREGOR, MELVIN MATERNACH ~ (MA-TER-NAK), WI-bid-AM RIGGAN, AND PETER WENSTRAND. '-{ - ~'-,J,,J ~ < t IV~ Ciif ~- r ~~~ i) ~ ~ ~ ~ Q,l. ~ ~ N r;-- _ ~ ~~Al~' 4. ALSO HAVE TWO FORMER MEMBERS OF THE &#45;&#45;&#45; ADVISORY COUNCIL ON SMALL BUSINESS FROM IOWA: - JON KNEEN (K-NEN) AND ELEANORE LEVY; AS WELL I. GIVEN STRUCTURE OF THE BOARD OF DIRECTORS AND COUNCILS. 1. TRULY REPRESENTS GEOGRAPHIC AREAS AND SOCIAL AND ECONOMIC INTEREST GROUPS. 2. THIS REPRESENTATION IMPORTANT BECAUSE DISTRICT IS SO DIVERSE--SLICE ACROSS ECONOMIC AMERICA A. AGRICULTURE, OF COURSE. 8. MANUFACTURING--HEAVY INDUSTRY, LIGHT INDUSTRY. C. Ill. COMMERCE/FINANCIAL ACTIVITIES. A. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis BANK HAS 3 BROAD AREAS OF ACTIVITY--OPERATIONS, SUPERVISION AND REGULATION, AND MONETARY POLICY. 8 B. SOMETIMES CHARACTERIZE OUR RESPONSIBILITIES VERY SIMPLY AS THREE LEGS OF A STOOL. 1. EACH OF THESE THREE AREAS SUPPORT THE FED'S BASIC MISSION: FOSTERING A SOUND BANKING SYSTEM AND HEALTHY ECONOMY. C. OPERATIONS--PROCESSING OF TRANSACTIONS--CHECK & ELECTRONIC. 1. PROCESS MORE THAN 5 MILLION CHECKS WORTH $3 BILLION DAILY. 2. ELECTRONIC PAYMENTS, PROCESS SOME 50,000 TRANSACTIONS WORTH MORE THAN $130 BILLION EVERYDAY. D. SUPERVISION AND REGULATION. 1. REGULATORY--DEVELOPMENT OF RULES THAT GOVERN OPERATION OF BANKS. 2. SUPERVISION--MONITOR ADHERENCE THROUGH EXAMINATIONS. E. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ECONOMIC RESEARCH ACTIVITIES. 9 1. NATIONAL/REGIONAL--PROVIDE INPUT INTO MONETARY POLICY. 2. OUR DECISIONS BASED ON ECONOMIC ANALYSIS AND INPUT FROM DIRECTORS, ADVISORY COUNCILS, AND FROM SESSIONS LIKE THIS. 3. INFORMATION TRANSLATED INTO POLICY THROUGH THE BANK'S PARTICIPATION IN THE FEDERAL OPEN MARKET COMMITTEE--THE FED'S MOST IMPORTANT POLICYMAKING BODY. A. COMMITTEE MEETS 8 TIMES A YEAR TO DETERMINE THE COURSE OF MONETARY POLICY. 8. AS THE BANK'S REPRESENTATIVE ON THE COMMITTEE, IT'S IMPORTANT THAT I HAVE AS MUCH INFORMATION AS POSSIBLE ABOUT THE STATE OF THE NATIONAL AND REGIONAL ECONOMY. IV. THIS LATTER ACTIVITY--WHY WE ARE HERE TODAY. A. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis PROVIDE SOME BACKGROUND ON AGRICULTURAL CONDITIONS AND THE ECONOMIC OUTLOOK AS WE SEE IT. 10 B. THE ISSUES AND CHALLENGES WE FACE IN MONETARY POLICY DECISIONMAKING. C. AND TO GAIN SOME FURTHER INFORMATION FROM YOU THAT WILL BE HELPFUL IN MAKING THESE DECISIONS. D. GARY BENJAMIN WILL BEGIN BY COMMENTING ON AGRICULTURAL CONDITIONS; KARL SCH ELD WILL THEN DISCUSS THE ECONOMIC OUTLOOK. E. THEN I'll REVIEW SOME OF THE MAJOR ISSUES THAT AFFECT THAT OUTLOOK AND OUR MONETARY POLICY DECISIONS. F. Digitized for FRASER https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis QUESTIONS AND YOUR PERSPECTIVES AFTERWARDS. 

Silas Keehn (1991, October 30). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_19911031_silas_keehn

@misc{wtfs_regional_speeche_19911031_silas_keehn,
  author = {Silas Keehn},
  title = {Regional President Speech},
  year = {1991},
  month = {Oct},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_19911031_silas_keehn},
  note = {Retrieved via When the Fed Speaks corpus}
}