Before World War II, Fed purchases of bankers acceptances also contributed meaningfully to Fed credit.
Meanwhile, the Fed also acquired bankers acceptances in the open market.
Open market operations in government securities remained an important source of Federal Reserve credit throughout the 1920s and even more so during the early 193Os, when discount window loans and Federal Reserve purchases of bankers acceptances dwindled.
During 1930 and most of 1931, however, Fed purchases of government securities were insufficient to offset net declines in discount window loans and Fed purchases of bankers acceptances.
20) The total increase in Federal Reserve credit was less than $1 billion because of declines in discount window loans and Fed holdings of bankers acceptances, but member bank reserves increased and the money stock stopped falling.
Those officials who were critical of open market purchases during the 1920s tended to argue that Federal Reserve credit should be extended only at the initiative of member banks, through the discount window or by sales of bankers acceptances to the Fed.
Moreover, in the absence of an obvious demand for Federal Reserve credit, as evidenced by discount window borrowing or sales of bankers acceptances to Reserve Banks, McDougal and others believed that reserves created by open market purchases could result in a dangerous misallocation of credit.
23) By 1932, discount window borrowing and Federal Reserve purchases of bankers acceptances had fallen to minimal levels, where they stayed throughout the remainder of the decade.
Although at times the quantity of discount window borrowing has been an operational target for open market policy, discount loans have been a far less important source of Federal Reserve credit since 1951 than they were before 1934, as have Fed purchases of bankers acceptances (see Figure 5).
31, 1999 1998 BALANCE SHEET DATA: Total assets $1,723,390 $1,707,563 Loans-net 1,176,125 1,163,705 Interest-earning deposits with other banks 187,685 200,203 Securities 193,446 115,017 Due from customers on bankers acceptances
and on deferred payment letters of credit 33,602 82,035 Total deposits 1,535,606 1,477,052 Long term debt 12,650 11,000 Bankers acceptances
and deferred payment letters of credit outstanding 33,602 82,035 Stockholders' equity 135,988 123,546 ASSET QUALITY RATIOS: Allowance for credit losses as a percentage of total loans 1.
Government securities, mortgage- and asset-backed securities, over-the-counter investment-grade corporate bonds, municipal bonds, and secondary money market trading in bankers acceptances
, commercial paper and Yankee and Euro certificates of deposit.