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GGD-81-49 1 (1981-05-21)

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BY THE COMPTROLLER GENERAL

Report To The Honorable

Henry S. Reuss

House Of Representatives

OF THE UNITED STATES




Response To Questions

Bearing On The Feasibility

Of Closing The Federal Reserve Banks


The need for Federal Reserve banks has been
questioned due to the passage of the Monetary
Control Act of 1980 which states that Federal
Reserve banks must now charge their members
for previously free services. In addition, the
Congress has given some consideration to re-
moving Federal Reserve bank presidents from
the Federal Open Market Committee, which
would remove their power to formulate mon-
etary policy.

The banks cost $790 million to operate in
1980. They own land and equipment worth
over $853 million. However, savings which
could be realized by closing the banks are un-
certain. Cost, service, and policy issues must
be resolved before the banks are closed to
assure savings and realize the fair market value
from sale of bank property. No alternative to
the banks presently exists.


  GGD-81-49
MAY 21, 1981


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