After the Accord: A History of Federal Reserve Open Market Operations, the US Government Securities Market, and Treasury Debt Management from 1951 to 1979

by Kenneth D. Garbade

Overview

In this book Garbade, a former analyst at a primary dealer and researcher at the Federal Reserve Bank of New York, traces the evolution of open market operations, Treasury debt management, and the microstructure of the US government securities markets following the 1951 Treasury-Federal Reserve. This volume examines how these operations evolved, responding both to external forces and to one another. Utilising a vast scope of primary material, the work provides insight into how officials fashioned the instruments, facilities, and procedures needed to advance their policy objectives in light of their novel freedoms and responsibilities. Students and scholars of macroeconomics, financial regulation, and the history of central banking and the Federal Reserve will find this volume a welcome addition to Garbade's earlier studies of Treasury debt operations during World War I, the 1920s, and the Great Depression and since 1983.

Product Details

ISBN-13:	9781108879644
Publisher:	Cambridge University Press
Publication date:	02/04/2021
Series:	Studies in Macroeconomic History
Sold by:	Barnes & Noble
Format:	eBook
File size:	6 MB

About the Author

Kenneth D. Garbade is a retired economist, formerly working at the Federal Reserve Bank of New York. He has been a Professor of Economics and Finance in the Graduate School of Business Administration at New York University, and a Managing Director at Bankers Trust Company working in the primary dealer department for US Treasury securities. He is the author of Fixed Income Analytics (1996), Birth of a Market: The US Treasury Securities Market from the Great War to the Great Depression (2012), and Treasury Debt Management under the Rubric of Regular and Predictable Issuance: 1983-2012 (2015).

Table of Contents

Foreword. The many varieties of dealer; 1. Introduction; Part I. The Sytem and the Market in the 1940s: 2. The government securities market; 3. Reserves, reserve requirements, and reserves management; 4. The institutional framework of open market operations; Part II. The Accord and its Aftermath: 5. The accord; 6. Taking stock; 7. New directions; 8. Challenging the new restrictions; 9. An additional limitation on the conduct of open market operations; Part III. The New Regime: 10. Monetary policy in 1954; 11. Policy instruments for reserves management; 12. Monetary policy in 1955; 13. Pragmatism in the accommodation of Treasury offerings; 14. 1956 and 1957; Part IV. Summer 1958 and its Consequences: 15. The summer 1958 Treasury financings; 16. Innovations in Treasury debt management; 17. The Treasury-Federal reserve stuy of the government securities market; Part V. The End of Bills Preferably: 18. The 1958-1960 gold drain; 19. Operation twist; Part VI. The Sixties: 20. Treasury debt management in the 1960s; 21. Monetary policy in the 1960s; 22. Repurchase agreements in the 1960s; Part VII. Updating Market Infrastructures – The Joint Study: 23. The association of primary dealers; 24. Dealer finance; 25. The government securities clearing arrangement; 26. Securities lending; 27. The book-entry system, Part I; Part VIII. The Seventies: 28. Treasury debt management in the 1970s; 29. Monetary policy in the 1970s; 30. Open market operations in the 1970s; Part IX. Infrastructure in the Seventies: 31. The secondary market in the 1970s; 32. The book-entry system, Part II; 33. Coda; 34. After 1979.

Editorial Reviews

'After the Accord brings to life the critical transition of the US Treasury market from war time controls to an essential cornerstone of private financial markets then and now. In this deeply researched history, Mr. Garbade captures the effort to develop institutions and procedures compatible with a free market in Treasury debt. As the world looks forward to $1 trillion deficits, policy makers and financial market practitioners are well served to be reminded that the integrity of America’s government debt was hard earned and can be readily lost.' Paul Volcker, Former Secretary of the Treasury for Monetary Affairs, President of the Federal Reserve Bank of New and Chairman of the Board of Governors of the Federal Reserve System

'Ken Garbade has done it again. An authoritative treatment of an important topic, this book explains how the Federal Reserve nurtured the U.S. Treasury securities market into the cornerstone of the world's financial system. Read it for a deep understanding of, and guideline to, the most liquid market in the world. It is a gem.' William L. Silber, Senior Advisor, Cornerstone Research, Former Marcus Nadler Professor of Finance and Economics, NYU Stern School of Business

'The relationship between Treasury debt management and Fed operations was thrust into the spotlight by the Global Financial crisis a decade ago, and remains there today due to the response to the coronavirus pandemic. However, that relationship has a long history. The Fed may enjoy a degree of independence at the policy level, but there is a natural interdependence between the Fed and Treasury at the operational level. Drawing on his unrivalled knowledge of the two institutions, Kenneth Garbade traces the history of that interdependence over a 30-year period in which the modern foundations of debt management and open market operations took shape.' Lou Crandall, Chief Economist, Wrightson ICAP

From the Publisher