History of the Boston Fed: A Timeline
December 23, 1913 — President Woodrow Wilson signs the Federal Reserve Act “to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.”
November 16, 1914 — The Federal Reserve Bank of Boston opens for business, serving the six New England states. Bankers, businesspeople, politicians, and educators had united to recommend that the organizing committee establish a Reserve Bank to serve the New England region.
The Bank is housed in two rooms below street level in the Converse Building at 101 Milk Street and is staffed by three officers and 14 clerks. 66 percent of all commercial banks in the District are member banks. Alfred Aiken, previously president of Worcester National Bank, is named Governor (now President) of the Federal Reserve Bank of Boston.
Discount-window lending is the primary tool used to accommodate seasonal swings in the demand for currency and credit.
1920 — The Bank begins construction of a building at 30 Pearl Street, which opens in 1922.
Early in the 1920s, most Federal Reserve officials regard open market purchases of securities primarily as a source of revenue rather than as a tool for controlling money and credit. Each regional Bank makes its own purchases of Treasury securities and bankers’ acceptances.
1923 — The Federal Reserve Bank of Boston opens an office in Havana, Cuba, to provide cable services for transferring funds, but closes it in 1927.
1929 — Eddie McCarthy starts work at the Bank as a messenger, earning $600 per year. He will work for the Bank for almost 70 years, becoming the Bank’s “eyes and ears” on the financial markets.
1932 — The Glass-Steagall Act of 1932 permits Reserve Banks to make loans to member banks on any security the Reserve Banks consider satisfactory, and in unusual circumstances even to make loans to nonbank borrowers; later, companies such as Raytheon and Anderson Little will take out loans from the Boston Fed.
1933 — The Glass-Steagall Act of 1933 places significant restrictions on the ability of banks to engage in investment banking.
1935 — The Banking Act of 1935 restructures the Federal Reserve System, introducing the basic structure that exists today. The Treasury Secretary and Comptroller of the Currency no longer serve on the Board.
As deficit financing of World War II expands, the Federal Reserve becomes a more active purchaser of Treasury debt.
The Federal Reserve and the banking industry develop and implement magnetic ink character recognition (MICR) encoding, allowing automated check processing.
Open market operations become the primary tool for carrying out monetary policy, with discount rate and reserve requirement changes used as occasional supplements.
Under Research Director George Ellis, the Bank studies the loss of textile and shoe-manufacturing jobs in New England, and begins to promote the idea that the region should specialize in high-value-added industries that tap its educational and intellectual resources.
1961 — George Ellis is named President of the Federal Reserve Bank of Boston.
1968 — Frank Morris succeeds George Ellis as President of the Boston Fed.
The Reserve Banks initiate the book-entry securities system.
1969 — Bank President Frank Morris joins the preeminent Boston business group, “The Vault.” The Bank begins planning for a new building, eventually choosing a site that held deteriorating warehouses, many of them abandoned. Construction on this site extends Boston’s financial district and leads to revitalization of the South Station area.
The Bank elects its first minority Director, Kenneth Guscott, who serves on the Board from 1974 until 1979, and its first female Director, Carol Goldberg, who serves from 1978 until 1982.
1970 — The Federal Reserve formally adopts monetary targets.
- Amendments to the Bank Holding Company Act bring one-bank holding companies under federal supervision, ushering in the modern era of bank-holding-company supervision and regulation. For the Federal Reserve, the exclusive federal regulator of bank holding companies, this means significantly expanded responsibilities.
1972 — The Boston Fed establishes regional check processing centers (RCPCs) in Windsor Locks, CT, and Lewiston, ME.
1976 — At the request of the state of Massachusetts, which is in a fiscal crisis, the Bank uses its expertise to examine the state budget and the administration’s plans to balance it. Bank researchers and executives travel to New York City to brief — and reassure — wary bond dealers on the state’s efforts to put its fiscal house in order.
1977 — The Community Reinvestment Act encourages depository institutions to help meet the credit needs of their communities.
- Bank staff move into the new building at 600 Atlantic Avenue.
1980 — The Depository Institutions Deregulation and Monetary Control Act requires all depository institutions to hold reserves and the Reserve Banks to price and offer their services to all depository institutions. The Act also applies uniform reserve requirements to all depository institutions and extends access to the discount window, among other provisions.
- The Boston Fed begins exploring the feasibility of applying image technology to check processing.
1987 — On October 19, the Dow Jones industrial average falls 508 points, or 22.6 percent. The Federal Reserve reassures markets that liquidity is available.
1989 — Frank Morris retires; Dick Syron becomes President of the Boston Fed.
The late 1980s to early 1990s are a period of substantial challenge to the Bank, given the severely distressed condition of depository institutions in New England and the region’s depressed economy. The region incurs a significant number of bank failures, and the Bank’s banking supervision, discount window, and financial services functions are challenged to ensure the maintenance of essential services and facilitate the orderly resolution of failed institutions.
1992 — The Bank publishes a groundbreaking statistical study that documents the role that race played in home mortgage approvals in Boston’s neighborhoods, leading to reforms.
1994 — The Federal Reserve Board implements same-day settlement rules to require paying banks to accept checks presented by 8:00 a.m. without requiring payment of presentment fees and to pay for those checks in same-day final settlement.
1994 — Cathy Minehan replaces Dick Syron as President, becoming the first female President of the Federal Reserve Bank of Boston.
- President Minehan continues the Bank’s active involvement with the Boston Public Schools and the Boston Private Industry Council’s workforce readiness efforts, begun under Frank Morris.
- As an experiment, the FOMC begins announcing policy decisions on the day they are made. This begins a period of increasing transparency.
- The Riegle-Neal Interstate Banking and Branching Efficiency Act permits interstate banking. Well before Riegle-Neal, New England was at the cusp of the interstate banking movement with the creation of regional compacts that allowed reciprocal mergers and acquisitions across state lines.
1999 — The Gramm-Leach-Bliley Act permits banks, securities firms, and insurance companies to affiliate within a new “financial holding company” structure, and expands the list of nonbanking financial activities permitted to banks. The Federal Reserve is given the challenge of serving as the umbrella supervisor of the new holding companies. The Act also establishes sweeping consumer privacy protections.
2003 — The New England Economic Adventure opens at the Boston Fed. The Adventure features interactive exhibits and activities that use New England’s history to teach about economic growth and rising living standards.
- Faced with declining check volume, the Reserve Banks implement a process to better match national infrastructure with volumes. Thirteen offices discontinue check processing, while two others expand.
2004 — The U. S. Treasury chooses the Boston Fed to build and maintain the systems and networks for the Treasury’s Internet payments platform (IPP) initiative, which will allow government agencies to electronically procure and pay for goods and services.
- The decision is made to move Boston check services to Windsor Locks, Connecticut, in early 2006.
- The Center for Behavioral Economics opens at the Boston Fed to gain a better understanding of how economic decisions are made and to improve policy making.
2005 — The Bank forms the New England Public Policy Center to serve policy makers, policy analysts, and the public by conducting high-quality research on major policy issues that affect the region. In its first year, the Center addresses New England water supply, housing, and energy issues.
2006 — Boston check services move to Windsor Locks, Connecticut, where 34 percent of the Bank’s check volume is deposited in electronic image form by year-end.
2007 — Mayor Thomas Menino joins President Minehan in a ribbon-cutting ceremony for the newly renovated and highly secure Federal Reserve Plaza.
- After nearly 40 years of public service at the Federal Reserve, President Minehan retires; Eric Rosengren becomes President of the Boston Fed.
- Escalating delinquency rates on subprime mortgages, falling house prices, and turbulent credit markets weaken the U.S. economy. Bank staff from several different departments collaborate to better understand the subprime mortgage crisis and lead an aggressive public outreach campaign.
2008 — The Bank organizes and co-sponsors a foreclosure-prevention workshop at Gillette Stadium in Foxborough, Massachusetts. About one-third of the 2,000 borrowers in attendance receive some kind of modification in their mortgages to help them try to avoid foreclosure.
- The Windsor Locks, Connecticut check-processing facility closes; First District paper check services are consolidated with those of other Banks at the Federal Reserve Bank of Philadelphia.
- The AMLF (asset-backed commercial paper money market mutual fund liquidity facility) opens. The Bank sets up the lending facility over one weekend, and provides $152 billion in loans in the first eight days of operation, providing much needed liquidity.
2009 — As mortgage foreclosures continue to climb, the Bank responds by organizing additional foreclosure-prevention workshops in Hartford and Boston.
- The Bank researches and supports efforts to revitalize the City of Springfield, Massachusetts, which faces significant poverty and labor market challenges in low income neighborhoods.
- The Bank works cooperatively with the Greater Boston Chamber of Commerce on promoting internships as a way to retain more college graduates in the area and hosts an informational event that attracts some 300 interns working in Greater Boston.
- The Building Owners & Managers association of Boston names the Federal Reserve Plaza the Office Building of the Year in the over-1,000,000-square-foot category.
2010 — Dodd-Frank Wall Street Reform
- In the wake of global recession, the Dodd-Frank Wall Street Reform and Consumer Protection Act introduces the most sweeping changes to Federal financial regulations since the Great Depression.
2011 — Bank named to Human Rights Corporate Quality Index
- This honor is due in great part to the Bank's enhanced recruiting efforts that support LGBT candidates
- Working Cities Challenge
The Bank establishes a grant competition for smaller cities in Massachusetts that is designed to foster local collaboration to improve the economic health and well-being of low-income residents.
- Cash Services Innovations
A new robotic technology by a local Massachusetts company called Baxter begins operation in Cash Services where he performs a variety of tasks alongside Cash department employees.
- Fed Presidents Send Joint Letter to SEC
The presidents of all twelve Federal Reserve Banks encourage the reform of money market mutual funds in a letter to the Security and Exchange Commission submitted by Boston Fed President Eric Rosengren.
- Centennial Kick-off Celebration
The Bank sponsors a Centennial Breakfast Seminar and launches its Centennial Website. Chairman Ben Bernanke addresses the entire Federal Reserve System live commemorating the milestone.
- Working Cities Challenge Winners Announced
Lawrence, Fitchburg, Holyoke, Chelsea, Somerville and Salem are named the winners of the Working Cities Challenge, a community development initiative for smaller cities that is highlighted in national media outlets including Time magazine and The New York Times.
October 16: Chair of the Federal Reserve Board of Governors Janet Yellen visits with community leaders and residents of Chelsea, MA at CONNECT, a consortium of local organizations working collaboratively to provide integrated employment services for residents related to economic instability, housing, and financial and educational opportunities.
October 17: Chair of the Federal Reserve Board of Governors Janet Yellen gives the keynote speech at the 58th Economic Conference, “Inequality of Economic Opportunity.”
Pilot program launches focusing on the sharing of cyber-threat information by and among small- to medium-sized banks.
Federal Reserve Bank of Boston earns a 100% on the Human Rights Campaign Foundation’s Corporate Equality Index as one of the best places in the nation to work for LGBT equality.
The Color of Wealth, a joint publication of the Federal Reserve Bank of Boston, Duke University, and The New School, is published. The publication details the results of a survey on wealth inequalities by race and ethnicity in the Boston Metro area.
Working Cities Challenge second round launches with grants awarded to Haverhill, Lowell, Pittsfield, and Springfield.
Working Cities Challenge announces expansion to Rhode Island.
60th Economic Conference, “The Elusive ‘Great’ Recovery: Causes and Implications for Future Business Cycle Dynamics,” is held October 14-15. Federal Reserve Board of Governors Chair Janet Yellen delivers the keynote address.
The U.S. Treasury selects the Federal Reserve Bank of Boston as the fiscal agent for the Navy Cash program based on their experience and support of EZ Pay and Eagle Cash programs. Navy Cash is a stored value card that allows sailors on board more than 135 ships worldwide to buy goods and services. The card also contains commercial debit strip capability, allowing them to also be used off the ship.
Stored Value Card announces the development of One Card, a multi-year project taking the three separate programs of EZ Pay, Eagle Cash, and Navy Cash and creating a single, interchangeable card.
Boston Fed holds its first Cybersecurity Conference, part of the Bank’s efforts aimed at mitigating risk to the financial system. Attendees include leaders from financial institutions across New England, cybersecurity specialists, and leaders from the Boston Fed.
Regional & Community Outreach launches Invested digital magazine. The publication focuses on issues affecting low- and moderate-income New Englanders by showcasing diverse perspectives through interviews.
Working Cities Challenge awards grants to three Rhode Island cities: Cranston, Newport, and Providence.
Boston Fed hosts “Raising the Floor: Strategies that Make Jobs Work for All.” The conference explores the challenges and opportunities in our economy to provide better quality jobs so working families and individuals can meet their basic needs, pursue economic mobility, and actively contribute to our collective prosperity.
The Consumer Payments Research Center (CPRC) moves management of operations from Boston to the Atlanta Fed. The CPRC started in 2008, focusing on the study of consumer payment choices. The central achievement of the CPRC is its data program, which includes the Survey of Consumer Payment Choice and the Diary of Consumer Payment Choice.
Working Cities Challenge expands to Connecticut with grants awarded to Danbury, East Hartford, Hartford, Middletown, Waterbury.
Working Communities Challenge expands to Vermont with grants awarded to Greater Barre, Lamoille County, Springfield Area, and Winooski.
Early Child Care for Working Parents Initiative launches with a goal to bring high-quality early childcare into alignment with the needs of working parents, many of whom are low to moderate income.
Stored Value Card program closes in Boston after more than 20 years and moves operations to the Omaha branch of the Federal Reserve Bank of Kansas City.
Federal Reserve announces the development of the FedNow Service, a real-time payment and settlement service to support faster payments. The program is led by Ken Montgomery, the first vice president and chief operating officer of the Boston Fed.
Main Street Lending Program is created to support small- and medium-sized businesses and their employees during the financial strain created by the COVID-19 pandemic by supporting the provision of credit to these businesses.
Boston Fed announces Project Hamilton, a multi-year collaboration with the Digital Currency Initiative at Massachusetts Institute of Technology (MIT) with an aim to explore the use of existing and new technologies to build and test a hypothetical digital currency platform.
Office of Diversity and Inclusion expands its name to Office of Diversity, Equity & Inclusion to better reflect the Bank’s values.
“Racism and the Economy,” a virtual event series presented by the Federal Reserve Banks of Atlanta, Boston, and Minneapolis, launches. The series brings together community, business, and academic leaders to examine the economic impact of racism and to advance ideas and actions to ensure equal access to economic opportunity for everyone.
Working Communities Challenge expands to Maine.
Federal Reserve Bank of Boston is named one of the “Best Places to Work for LGBTQ Equality” by the Human Rights Campaign for the 7th straight year. The Bank earns a score of 100 on the HRC Foundation’s 2021 Corporate Equality Index, a benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality.
After 35 years of service with the Boston Fed, Eric Rosengren retires on September 30; First Vice President Ken Montgomery becomes interim president & CEO.