Federal Reserve to Limit District Banks' Budget to a 5.2% Increase in '85
Federal Reserve to Limit District Banks' Budget To a 5.2% Increase in '85
Even Federal Reserve banks must make financial sacrifices, at least to meet the guidelines set forth in their 1985 budget.
The Federal Reserve Board has endorsed its staff's recommendation to limit the 12 Federal Reserve District banks' budget to a 5.2% increase over 1984 expenses. An earlier report from a committee that included the presidents of the Federal Reserve banks had advised an increase of 6% to 7%.
The district banks must deliver their budgets to the board by Oct. 5 for analysis and a review led by Fed Vice Chairman Preston Martin. Final approval will come in mid-December, and the budget will take effect in January.
A 5.2% increase would amount to about $57 million, which would bring the 1985 budget to $1.143 billion. The difference between the approved guidelines and the recommendation of the district bank officials amounts to more than $13 million, a Fed report said.
"This is a deliberate effort to apply some discipline,' Fed Chairman Paul Volcker said. "We have to evaluate what is necessary and what is not.'
The district bank budgets vary by district and responsibility. The New York Fed's expenses, with its special money desk duties, is way in front of the other district banks. …