by Geoffrey M.B. Tootell
March/April 1991

It is often argued that the institutional structure of the Federal Reserve System influences the formulation and attainment of national monetary policy goals. District Bank presidents do play a major role in the formulation of monetary policy. The Federal Reserve Bank of New York always has one of twelve votes at the policy-making Federal Open Market Committee (FOMC) meetings, and four of the remaining eleven votes rotate among the other Reserve Bank presidents.

This article tests whether regional economic performance excessively influences the votes of District Bank presidents. The article quantifies the influence of regiona! conditions on District Bank voting by analyzing the monetary policy actually advocated by individual members of the FOMC. The results indicate that District Bank presidents set policy dependent on national, not their regional, conditions. A consensus- forming tendency could be the force that drives out any differences in tastes or models among FOMC members. Perhaps the ability to capture and utilize differentdnformation is the reason the regional diversity endures at the Fed.

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