Inflation Warning: Federal Reserve Increases Their Fee Schedule for 2012

November 1st, 2011
in econ_news

Econintersect:  The Federal Reserve has a dual mandate in providing services to banks:

1) They must have a full cost recovery in the long run on services they provide.  The average recovery between 2001 and 2010 was 97.9%.  The actual cost recovery in 2010 was 105.% - while the estimated recovery is 102.3% in 2011 and 100.8%  in 2012.

2) The Federal Reserve is also required to set prices high enough to allow other service providers to compete effectively with the Federal Reserve in providing similar services.

Follow up:

Compared with the price index for 2011, the price index for all Reserve Bank priced services is projected to increase 4% in 2012.  Click on images below to enlarge.

Note on the index below, the Federal Reserve's pricing is increasing at a faster rate than the GDP price index.

The link below leads to a PDF file with the full fee schedule and more backup detail to what was reported above.

source: Federal Reserve


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