IDEAS home Printed from
   My bibliography  Save this article

Origins of the Federal Reserve book-entry system


  • Kenneth D. Garbade


The conversion of U.S. Treasury securities from physical to book-entry form was a major event in the history of the Treasury market. The conversion, which began in 1966, resulted in an automated system that has greatly reduced market operating costs and risks. This article examines the origins and development of the Federal Reserve book-entry system for Treasury securities. It suggests that the system was the product of three important factors: the interest of the Federal Reserve Banks and the Treasury in lowering their operating costs and risks, the intention of the Reserve Banks and the Treasury to preserve the liquidity of the market, and the desire of the Reserve Banks to reduce member bank operating costs. Two critical incidents-a loss of securities at a Reserve Bank in 1962 and an "insurance crisis" in 1970-71-played major roles in the early development and subsequent expansion of the book-entry system.

Suggested Citation

  • Kenneth D. Garbade, 2004. "Origins of the Federal Reserve book-entry system," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 33-50.
  • Handle: RePEc:fip:fednep:y:2004:i:dec:p:33-50:n:v.10no.3

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Gerald D. Manypenny & Michael L. Bermudez, 1992. "The Federal Reserve Banks as fiscal agents and depositories of the United States," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 727-737.
    2. Richard W. Lang, 1979. "TTL note accounts and the money supply process," Review, Federal Reserve Bank of St. Louis, issue Oct, pages 3-14.
    3. Michael J. Fleming & Kenneth D. Garbade, 2002. "When the back office moved to the front burner: settlement fails in the treasury market after 9/11," Economic Policy Review, Federal Reserve Bank of New York, issue Nov, pages 35-57.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Garbade, Kenneth D. & Keane, Frank M., 2017. "The Treasury Market Practices Group: creation and early initiatives," Staff Reports 822, Federal Reserve Bank of New York.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednep:y:2004:i:dec:p:33-50:n:v.10no.3. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Farber). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.