The research outputs of the reserve banks especially have long contributed to the vibrant intellectual foundation of the Fed and have driven an ethos around thought leadership, education, and outreach.Īt times, the research function of the reserve banks has proven controversial. The volume of research produced by the reserve banks and the board is nearly 20 times that produced by other regulators, such as the Financial Stability Oversight Council and the Securities and Exchange Commission. Since then, the research function has expanded in depth, scale, and scope. Research departments at the board of governors and at the 12 reserve banks were established shortly after the enactment of the Federal Reserve Act of 1913 for the purpose of collecting data and reporting on regional conditions and member banks’ conditions. Origins and Evolution of the Research Function

Here we present some highlights from our research, which is forthcoming in the Review of Banking and Financial Law. We wanted to investigate whether the research agenda has changed over time-whether there is more focus on controversial or activist issues-and whether the individual reserve banks have substantially different research agendas. To fill this gap, we draw together primary source documents and a new dataset to study the research function of the Fed from its founding through the present day. As a result, few understand what drives the intellectual environment and policy agendas across the Fed system. Some members of the Senate Committee on Banking, Housing, and Urban Affairs have expressed concern about the “increasing focus on politically-charged issues” in the research agendas of several of the reserve banks, raising questions about whether the reserve banks are overstepping the bounds of their statutory mandates and risking inflicting reputational damage on the Fed system as a whole. But to date, there has been very little scholarship discussing the legal structure, governance arrangement, and empirical landscape of the research function of the Fed. Recently, however, the research function of the Fed has come under scrutiny. The Board of Governors of the Federal Reserve and reserve banks have large and well-resourced research staffs, whose work both informs Fed policy and constitutes part of the Fed’s communication with the public. Research is a core function of the Federal Reserve (Fed).

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