Journal Article

Federal Reserve control of credit

Abstract: In the early days of the Federal Reserve, changes in the discount rate were the principal instrument through which the central bank exercised control over credit conditions. In this -address, Strong explains the use of discount rate changes as a means of controlling the volume of credit and influencing interest rate movements. He considers criteria for discount rate changes, concluding that in the absence of gold movements under a reestablished gold standard, policy makers have no option but to look to general economic conditions.

Keywords: Discount; Federal Reserve banks; Credit control; Federal Reserve System - History;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Quarterly Review

Publication Date: 1989

Issue: Special

Pages: 6-14