Federal Reserve Credit
Total volume of Federal Reserve credit outstanding is the supply which the Federal Reserve banks have contributed to member bank reserves and consists principally of earning assets of the Federal Reserve banks: (1) bills discounted, (2) bills bought, either outright or on repurchase agreement, (3) advances to member banks, (4) discounts for member banks, (5) holdings of U.S. government securities, either outright or under repurchase agreements, and (6) all other Federal Reserve bank credit. Included in the miscellaneous forms of Federal Reserve banks' credit is the float, or the difference between items at Federal Reserve banks in process of collection and the total of deferred availability credits, such difference representing credits to accounts of clearing member and nonmember banks before charge to drawee banks upon actual collection.
Also included in the miscellaneous forms of Federal Reserve credit is the catch-all classification "other Federal Reserve assets," which in recent years includes an important international item, holdings of foreign currencies, reflecting swap foreign exchange arrangements with foreign central banks and other operations in foreign exchange, International Monetary Fund gold deposits, as well as Federal Reserve banks' investments in bank premises and other assets.
Such "other Federal Reserve assets" are now reported gross, instead of net after deduction of capital accounts (capital paid in, surplus, and other capital accounts), other liabilities, and accrued dividends. The total of these latter items is now shown gross by itself as "other Federal Reserve liabilities and capital," representing a use instead of a source of member bank reserves.
Federal Reserve credit is the medium through which the Federal Reserve System affects the volume of member bank reserve balances; an increase therein increases member bank reserve balances, a decrease reduces them. For fuller discussion of the factors affecting supply and use of member bank reserves.