• On behalf of the Federal Reserve System, the Federal Reserve Bank of New York offers banking and financial services to more than 200 foreign central banks, foreign governments and international official institutions.

• New York Fed services are available only to public institutions.

• Most of the assets held in foreign official accounts are in the form of U.S. Treasury and agency securities. Foreign accounts also hold a large quantity of monetary gold at the New York Fed.

Overview
On behalf of the Federal Reserve System, the Federal Reserve Bank of New York offers banking and financial services to more than 200 foreign central banks, foreign governments and international official institutions. The services provided by the New York Fed are available only to public institutions.

The Bank's services for foreign official account holders are in four main areas: demand deposit transactions, investments, custodial and safekeeping responsibilities, and foreign exchange operations. The Bank offers other services on an occasional basis, such as providing technical assistance and training to foreign central bankers. The wide-ranging services available to foreign account holders have, in large part, given the New York Fed its significant role in the international financial system.

Demand Deposit Transactions
The New York Fed effects payments from and to foreign official accounts via the Reserve System's Electronic Payment System, commonly referred to as Fedwire^TM. In 2007, the New York Fed processed an average of about $60 billion a day in funds receipts and transfers for foreign official accounts.

Foreign official account holders also can send U.S. currency to the Bank for deposit in the accounts. Should other central banks need U.S. currency, the New York Fed will arrange the shipment of banknotes or make the currency available for pickup at the Bank. The customer's account is charged for the amount of currency provided.

Investments
The New York Fed invests funds in money-market instruments for foreign central banks and international official institutions. Investments may be in overnight repurchase agreements, federal funds, or U.S. Treasury and other securities. The Bank also purchases and sells securities on these customers' behalf as part of an automatic investment program, or if requested. It is important to note that the Federal Reserve does not give investment advice. Any automatic investment program must be specific in the type of securities a customer wants to buy. In 2007, the New York Fed invested on average about $70 billion a day on behalf of foreign official institutions.

Custodial and Safekeeping Responsibilities
Most of the assets held by foreign official accounts at the Bank are held in the form of marketable U.S. government and agency securities, most of which are deposited in electronic (book-entry) form at the New York Fed. At year-end 2007, foreign official and international accounts held more than $2 trillion in U.S. dollar-denominated assets.

Safekeeping services including interest and maturity payments, are provided directly by the New York Fed for Fedwire^TM-eligible securities or through an arrangement with the Depository Trust and Clearing Corporation (DTCC) for some non-Fedwire^TM securities. In 2007, the average daily volume of these services was about $80 billion. The Bank also provides facilities for the clearing and settlement of a customer's own investment trades.

The New York Fed's gold vault stores just over 6,630 tons of monetary gold. The vault is the largest concentration of monetary gold in the world, constituting one-quarter of the world's official gold supply.

Foreign Exchange
The New York Fed will, at the request of a customer, execute transactions in the U.S. foreign-exchange market for the purchase and sale of certain non-dollar currencies. In such transactions, the Bank acts as agent for the customers, and these transactions are not considered intervention operations by the U.S. monetary authorities.

Other Services
On a less frequent basis, the New York Fed provides other services to foreign central banks and international official institutions. One of the services is an annual central banking seminar. In recent years, about 80 to 90 representatives of foreign central banks have attended this seminar, which consists of a series of group discussions and lectures at the Bank and the Board of Governors of the Federal Reserve System in Washington, D.C.

As another service, the New York Fed provides onsite technical assistance to a requesting central bank in a variety of areas relating to central bank operations. This assistance ranges from how to implement new technology to how to run bank examinations.

November 2008