PrefaceTHEBOARD’SPUBLICATIONSCOMMITTEEhad overall responsibilityfor the preparation of this edition. Major contributions were made bythe following:DIVISIONOFRESEARCHANDSTATISTICSMichael J. Prell, Thomas D. Simpson, Lawrence Slifman, Darrel Cohen,S. Ellen Dykes, Gregg Forte, Sherrell E. Varner, Catherine H. Farnsworth,E. Constance Kinzie, and Gwenavere G. White-DuboseDIVISIONOFMONETARYAFFAIRSDonald L. Kohn, David E. Lindsey, Brian F. Madigan,Normand R.V. Bernard, James A. Clouse, and Joshua FeinmanDIVISIONOFINTERNATIONALFINANCEEdwin M. Truman and David H. HowardDIVISIONOFBANKINGSUPERVISIONANDREGULATIONRichard Spillenkothen, Frederick M. Struble, and Virginia M. GibbsDIVISIONOFCONSUMERANDCOMMUNITYAFFAIRSGriffith L. Garwood and Maureen P. EnglishDIVISIONOFRESERVEBANKOPERATIONSANDPAYMENTSYSTEMSFlorence M. Young and Jack K. Walton, IIDIVISIONOFINFORMATIONRESOURCESMANAGEMENTPeter G.Thomas, Barry E. Huber, and Carol WisdomLEGALDIVISIONOliver Ireland and Elaine M. BoutilierOFFICEOFBOARDMEMBERSJoseph R. CoyneThis is the eighth edition of The Federal Reserve System: Purposes andFunctions. It has been revised by staff members of the FederalReserve Board to reflect the changes that have taken place inthe monetary, regulatory, and other policy areas since publica-tion of the seventh edition in 1984. It incorporates majorchanges in the law and in the structure of the financial systemthat have occurred over the past decade.