The Federal Reserve.

• Position: Interview with Federal Reserve board members Cynthia Parker and Betsy Lawer

Alaska Business Monthly interviews Federal Reserve Board members Cynthia Parker and Betsy Lawer.

The Federal Reserve is a central banking institution designed to ensure the stability of the U.S.'s monetary system. One feature of the Federal Reserve Board is to call upon diverse people to serve as directors to offer various perspectives about the economy. This grassroots approach is part of the consideration in the conduct of monetary policy, and is unique in the world. It reflects America's values as a democracy and strengthens the system by providing an anecdotal check on the economy, gathered by common business people.

Board members report first-hand information on key developments in various geographic areas and sectors of the economy. In this way, they complement the economic research efforts of the 12 Federal Reserve banks and the Board of Governors in Washington, D.C. Directors also give opinion on the discount rate, are involved in the auditing function of the reserve banks, and review personnel policies.

There are three Alaskans seated on the 12th District Board and its branches. Betsy Lawer, vice chair and chief operating officer of First National Bank, is a director on the Seattle Branch; Cynthia Parker, CEO and executive director at the Anchorage Neighborhood Housing Authority, is deputy chair of the San Francisco Board; and just-elected Byron Mallott, executive director of the Alaska Permanent Fund, is the former director of the Seattle Branch and a current member of the San Francisco Board.

ABM: Federal Reserve board members are divided into three classes. Can you explain that division and the differing ways in which directors are appointed?

PARKER: Class A members are members of the banking industry from institutions who are member banks of the Federal Reserve. Directors for each district are appointed by the head office. (Betsy Lawer is a class A member.)

Class B members represent commerce and are not affiliated with the banking industry These directors are elected by the bank member institutions and are from various industry backgrounds. (Byron Mallott is a Class B member.)

Class C members are appointed by the seven-member Board of Governors in Washington, DC. These directors represent consumer interest and are not allowed to own any bank stock or shares. Only Class C members can serve as chair or deputy chair of the board.

ABM: As one of 12 reserve banks that make up the Federal Reserve, what is the primary responsibility of the Federal Reserve Bank of San Francisco?

LAWER: Each of the 12 Reserve Banks serves a certain region of the country, and all but one have other offices within their districts to help provide services to depository institutions and the public. The San Francisco District serves nine Western states: Alaska, Washington, Oregon, Idaho, Arizona, Utah, California, Nevada and Hawaii, as well as U.S. territories of America Samoa, Guam and the Northern Mariana Islands. Branch offices for the 12th District are located in Seattle, Portland, Los Angeles and Salt Lake City.

The Reserve Bank of San Francisco carries out a variety of system functions, including operating part of...