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Sunday, February 14, 2016

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2010 Bank Highlights


The Audit Department co-sponsored a fraud prevention session with the Enterprise Risk Management Department to provide Bank management with useful tips to identify potential fraud scenarios and specific actions that may help uncover such acts. The department also continued to provide support to other Federal Reserve organizations, the audit profession, and the international audit community. Three staff members assisted staff at the Board of Governors by participating in reviews of other Federal Reserve Districts, and one staff member assisted on an audit at the New York Fed. During 2010, the Bank's general auditor became a member of the Board of Governors of the Philadelphia Chapter of the Institute of Internal Auditors. In addition, a staff member shared best practices with auditors at the Bank of Lithuania by observing an audit of the bank's e-mail function and by presenting at an international auditing conference in Vilnius, the capital of Lithuania.

Cash Services

In 2010, the currency counting division installed the final software release for the upgrade of the high-speed currency processing machines. In addition, Cash completed the installation of the second-generation currency authentication sensor. This was the first milestone of a multi-year strategic plan to upgrade all the electronic sensors that authenticate currency to keep pace with advancements in technology and the new designs of U.S. currency. Cash management continued to provide leadership on several System work groups to make improvements in training, business continuity, and fraud detection.

Community Development Studies and Education

The Community Affairs Department is now the Community Development Studies and Education Department. The new name better reflects the department's mission and recognizes its two functions: community development and economic education. In May 2010, the department hosted the fourth biennial community development conference, Rethink. Recover. Rebuild: Reinventing Older Communities. Federal Reserve Chairman Ben Bernanke visited the conference and toured the Philadelphia Navy Yard as part of the program. The department continued its work on the longitudinal study of the effectiveness of homeownership counseling. Other department studies in 2010 covered such topics as the Federal Housing Administration's loan portfolio, Neighborhood Stabilization Program efforts across the country, evidence of student achievement in the Bank's personal finance curriculum, and the status of high school personal financial education in the United States. The department's researchers have responded to various requests to speak on these topics at System, professional, and industry events. The department's economic education staff reached 700 teachers with courses designed to help K-12 teachers understand economic concepts, the Federal Reserve System, monetary policy, and personal financial education through its various courses, lesson plans, and conference presentations. The department continued to expand its community outreach efforts by visiting legislative staff in the District. Staff also developed a Community Outlook Survey, which monitors economic factors affecting low- and moderate-income households, and released the first quarterly results in early 2011.

Enterprise Risk Management

Philadelphia's ERM officer co-chaired the International Operational Risk Working Group's conference and led a presentation on how central banks use heat maps and other tools used in reporting. ERM staff provided leadership for the Bank's Green Team, which promotes environmental conservation and sustainability. Also in 2010, the team sponsored an exposition on green products and services as well as an educational workshop on energy conservation for Bank employees. In addition, ERM continues to lead the Bank's innovation initiative, which is committed to encouraging and supporting employee ideas, ranging from process improvement to new business opportunities.

Facilities Management

The Facilities Management Department continued to support the Bank's green initiatives with the installation of a solar hot water heating system on the roof and the initiation of a four-year project to replace the building's lighting system with a highly efficient, intelligent system. The department also modernized the Bank's emergency power distribution infrastructure, a project that provided the Bank with a more robust emergency power grid. The department also completed a project to relocate three departments to the fifth floor of the Bank. The remaining area of the fifth floor is being prepared for possible use by an outside tenant.

Financial Institutions Relations

In 2010, the Financial Institutions Relations staff met with senior executives at more than 90 percent of Third District financial institutions. Discussions centered on current business trends, credit conditions, fees, general regulatory issues, and other relevant matters, as well as the national and regional economy. In addition, department staff actively participated in meetings of regional community banking associations to further strengthen relationships and gain knowledge. The department's staff also used the meetings with financial institution representatives to build a base for selecting future members of the recently formed Community Depository Institutions Advisory Council.

Financial Management Services

Staff in FMS chaired several System groups, including the COSO Coordinators Group, the Cost Accounting Group, the Enterprise Risk Management Group, the Government Entity Accounting Reporting System Management Steering Group, and the Integrated Accounting System Enhancement Evaluation Work Group. The Bank's chief financial officer also acted as trustee chair for the Accounting Professional Education Program and hosted its 13th annual program attended by some 75 FRS financial management and audit professionals. FMS worked on many departmental strategic and internal initiatives that supported both System and Bank goals and objectives. One of these objectives was to prepare the Private Sector Adjustment Factor module of the Capital Tracking and Information Network budgeting application for use by all Reserve Banks. In 2010, the module was used on a voluntary basis. In 2011, it will be used in tandem with the existing process and will be centralized in 2012.

Financial Statistics

In 2010, Financial Statistics staff continued to provide superior analysis to ensure the accuracy and quality of incoming financial information used by Federal Reserve policymakers responding to changing economic conditions. Members of the staff made important contributions to the Federal Reserve System's Statistics and Reserves Technology Modernization Project, to the management and enhancement of existing technology applications and business processes, to the Federal Reserve's Census of Finance Companies, and to System-level training initiatives in the Statistics area.

Human Resources

In 2010, the Bank established the Office of Diversity and Inclusion to fulfill one of the provisions of the Dodd-Frank Act. In addition to supporting ongoing diversity initiatives, the office is developing standards and procedures to ensure inclusion of minorities and women in all matters, including procurement activities to increase participation in our supplier ranks. Enhancements to Human Resources information systems included automation of the tuition reimbursement process and an improved performance review tool, ePerformance. The department also launched an upgraded recruiting software system to strengthen recruitment practices and enhance the overall effectiveness of talent management processes. The Talent Management and Organizational Development division held a three-day Education Fair highlighting the various learning and development opportunities available to all employees. Human Resources supported the local responsibilities related to implementing the System's Enterprise Information Technology Strategies initiative.

Information Technology Services

IT Services managed many Bank projects, supporting most business lines, and provided significant support to initiatives for the Federal Reserve System and the Treasury. The department implemented enhancements to the Treasury Check Information System (TCIS) and the Collateral Management System (CMS). IT staff also provided software quality assurance services for major projects throughout the Federal Reserve System and designed and implemented a system to host and enable a securities evaluation system related to the RADAR data warehouse (read the story). The department upgraded the Bank's local area network facilities. The Groupware Leadership Center, which provides System-wide e-mail and calendar services, delivered new and enhanced capabilities, and completed testing and certification of a new BlackBerry platform that provides enhanced resiliency. In addition, the GLC relocated core video conferencing infrastructure components from an externally hosted site.

Law Enforcement

The Law Enforcement Department has now fully integrated the off-site screening facility that was opened in the fourth quarter of 2009. In 2010, all security surveillance systems were completed and are now in use. In addition, the department completed a major modernization of the pedestrian-entry security portals. This effort has resulted in faster screening of Bank employees and visitors.


The Legal Department devoted significant time to analyzing the Dodd-Frank Wall Street Reform and Consumer Protection Act and assisting in its implementation at the Bank. Shortly after passage of the act, the Bank's general counsel participated in a Town Hall meeting to educate the Bank's officers and employees on the scope of this expansive legislation. Department officers continued to provide legal support to initiatives at the System level, including the System's Groupware Leadership Center, the Workers' Compensation Coalition, and a System-wide litigation project, among other collaborative legal efforts.

Payment Cards Center

The Payment Cards Center organized three important meetings in 2010. The first addressed payment card fraud and the technological options available to mitigate those risks. The second focused on economic and regulatory developments in the market for prepaid cards. The third event celebrated the center's 10-year anniversary. This conference brought together more than 100 representatives from industry, nonprofit organizations, regulatory agencies, and academia to discuss the future of consumer credit and payments in the United States. In addition to conferences, center staff produced influential papers on topics that included the triggers of mortgage default, the changing mix of payments used by consumers, and the use of consumer testing to inform the regulation of overdraft fees. Center staff also participated in the Board's ongoing rulemaking process for designing “reasonable and proportional” debit interchange fees and in the Federal Reserve System's planning process for implementing portions of the Dodd-Frank Act.

Public Affairs

The Public Affairs Department supported the Bank's outreach to communicate information about regulatory reform to key stakeholders. These activities included the Bank president's public speeches, meetings with legislative staffs as well as a briefing for the Joint Economic Committee of Congress, and communications to other key constituents. In October, the department held a workshop on regulatory reform for journalists. The department also published The Second Bank of the United States: A Chapter in the History of Central Banking, a booklet that will be used by teachers nationwide using the Bank's economic education programs. The department also helped promote the biennial Reinventing Older Communities conference for the Bank's Community Development Studies and Education Department, including a visit by Chairman Bernanke as part of the event. Public Affairs also welcomed more than 25,226 people to the “Money in Motion” exhibit in 2010.


In 2010, the Research Department led a cross-functional group in developing a financial stability report and briefing process. This report is being shared with the Board of Governors' Office of Financial Stability Policy and Research. In September, the department participated in the System's conference on the Dodd-Frank Wall Street Reform and Consumer Protection Act. The research director served on the five-member Steering Committee, and another Research officer served on a working group for the conference. Other System projects that Research supported last year include the quantitative surveillance project on macro-financial risks, a working group on financial firm disclosures, and the Foreclosure Mitigation Task Force. Staff in the department's Real-Time Data Research Center worked with the Board of Governors to make changes to the quarterly Survey of Professional Forecasters to support bank examinations. In addition, department staff continued to publish their research in top-tier academic journals in economics and finance and presented their work at high-profile conferences and workshops. Research library staff continued to coordinate the library management system shared by the Philadelphia, Dallas, Richmond, and St. Louis Reserve Banks.

Retail Payments

The final phases of the Retail Payments check consolidation were completed in 2010. Philadelphia printed and distributed substitute checks until the end of the third quarter and managed the workflows for Check 21 electronic files into the fourth quarter. The substitute check printing and distribution functions were successfully moved to the Federal Reserve Bank of Cleveland and responsibility for managing electronic files was successfully moved to the Federal Reserve Bank of Atlanta.

Supervision, Regulation and Credit

Supervision, Regulation and Credit (SRC) staff continued to improve supervision through enhanced analytics while maintaining core principles and applying a balanced approach to bank examinations. The Dodd-Frank Act ushered in a transitional phase for the Federal Reserve and SRC and expanded the Fed's overall responsibility. Three SRC officers took on high-profile assignments, assisting System efforts related to supervising large banks, assessing risk management practices, and enhancing supervision operations. Department staff led an initiative to acquire and centralize large databases and make them available to Federal Reserve staff. The result was RADAR (read the related story). SRC staff also made presentations at financial trade group conferences, in academic settings, and at individual outreach engagements. In addition, SRC hosted periodic outreach events such as the Bankers' Forum, Directors' Workshops, and the CFO/CPA Roundtable.

Treasury Services

In 2010, the Bank's Treasury Services Department implemented important enhancements to the Collateral Management System, which it operates for the entire Federal Reserve System. System improvements included the enhanced functionality of both the Automated Loan Deposit and the Term Deposit Facility. Additionally, the department successfully developed and tested enhancements to support the revised Board of Governors' Payment System Risk policy. The department also provided direction and expertise on collateral-related issues to the credit risk management community.

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