Response to Questions Bearing on the Feasibility of Closing the Federal Reserve Banks

The Monetary Control Act of 1980 requires Federal Reserve banks to begin charging their national and State bank customers for services by September 1981. There is speculation that when Federal Reserve banks charge for service, private commercial banks will compete for and eventually win the Federal Reserve System's customers. Considering these factors, and in the interest of holding down Government spending, GAO was asked to: (1) review the costs to operate the banks; (2) determine the estimated market value of the banks' property and equipment; (3) review the operating costs of one bank in detail, including administration; and (4) present a discussion of the implications of closing the banks.