Government Performance and Results Act Annual Performance Report
2011
Print- Supervisory and Regulatory Function
- Payment System Policy and Oversight Function
- Internal Board Support Function
Payment System Policy and Oversight Function
Strategic Goals
Policy: Foster the integrity, efficiency, and accessibility of U.S. payment and settlement systems
Oversight: Provide oversight of Reserve Banks
Strategic Objectives
- Effective System strategies, projects, and operations: Produce assessments and oversight of Federal Reserve System strategies, projects, and operations
- Efficient, accessible payment systems: Develop sound, effective policies and regulations that foster the integrity, efficiency, and accessibility of payment, clearing, and settlement systems; and oversee U.S. dollar payment, clearing, and securities settlement systems by assessing their risks and risk-management approaches against relevant policy objectives and standards
- Analysis of payment system dynamics and risks: Conduct research and analysis that contributes to policy development and increases the Board's and others' understanding of payment system dynamics and risk
Performance Metrics
See table 2 for the five metrics, targets, and results for the one-year period.
| Metrics | Target | Results |
|---|---|---|
| Complete all scheduled Reserve Bank on-site reviews and annual Reserve Bank examinations, review proposed Reserve Bank budgets, and oversee the external audit of Reserve Bank financial statements each year. | Complete all scheduled reviews. |
|
| Monitor and ensure the full collateralization of Federal Reserve notes, as defined by the Federal Reserve Act. | Ensure 100 percent collateralization. |
|
| Inform the Board (through its oversight committees) of important developments and issues in a timely and effective manner. | No specific target. |
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| Plan for the payments workshop, distribute a call for papers, invite keynote speakers, and select papers for presentation at the workshop. | Have a call for papers out and papers submitted for a conference in 2011. |
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| Respond to requests for policy interpretations, deviations, and exception requests from the Reserve Banks. | Respond in a timely manner to requests from the Reserve Banks. |
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Operational Processes and Resources Required to Meet Goals
In this Section:
Operational Processes, Skills, and Technology
Board staff oversees the policies and operations of the Federal Reserve Banks as providers of financial services to depository institutions, the Treasury, and other entities, along with the implementation of the various liquidity facilities approved by the Board in response to the recent financial crisis. The scope of this oversight extends to the functions of the Reserve Banks that support the Federal Reserve's overall mission (e.g., human capital, financial, and information technology management).
Staff members conduct analyses concerning the structure, efficiency, and integrity of U.S. dollar payment, clearing, and settlement systems and the effects of the Board's policies on those systems. They undertake original research into issues of interest to the Federal Reserve in the areas of payment, clearing, and settlement systems, including the interrelationships among systems, long-run technological trends and their economic implications, and interbank relationships. In addition, they analyze the cost and scale efficiency of the Reserve Banks in the provision of financial services. Staff members depend on state-of-the-art office automation and sophisticated analytical tools and automation support to perform their work.
Funding and Resources
The oversight, research, and policy development activities related to this function are conducted mainly by staff of the Board's Division of Reserve Bank Operations and Payment Systems, who represent a variety of disciplines. The workforce is largely composed of analysts with graduate degrees in public policy, business, finance, economics, or information technology; many have had experience working at a Reserve Bank or in the private sector. The division's 2011 expenses were $30 million, which included funding for 154 authorized positions.
Validation and Verification of Measured Values
The performance of the payment system policy and oversight function is monitored on the basis of numerous qualitative factors, including the thoroughness of staff research and the quality and timeliness of staff analysis and related recommendations. For example, performance in the oversight area is measured by the extent to which staff's work improves the quality of Reserve Bank decisions and helps Reserve Bank management strengthen sound internal control systems and efficient and effective performance.
