2008 Annual Report

CHICAGO FED HIGHLIGHTS OF 2008

The Federal Reserve Bank of Chicago continued to play an important role in a variety of Federal Reserve System efforts to address a weak economy, volatile financial markets, and the rapidly changing payments landscape.

Policy Analysis and Research

Economic Research and the Financial Markets Group provided high-quality research on topics including:

Housing, mortgage and foreclosure issues.
The automotive industry.
The Emergency Economic Stabilization Act of 2008.
Monetary policy.
World inflation index-forecasting.
International responses to economic and financial challenges.
Access to central bank services for financial market institutions in different countries.
Inflation and asset pricing.
Liquidity risk management and stability issues associated with financial market clearing and settlement arrangements.
Financial markets and clearing and settlement ?operations.

Twenty-one new working papers were completed, and 19 previously written papers were accepted for publication in scholarl?y journals.

Eight papers were added to the financial markets policy discussion paper series.

Research analyzing a range of economic and policy developments appeared in Ag Letter, Chicago Fed Letter, and Economic Perspectives.

Supervision and Regulation

Supervision and Regulation responded to depressed commercial and residential real estate values, struggling automotive and manufacturing industries, and stresses in the credit and liquidity markets by:

Increasing bank supervisory activities and realigning resources to meet emerging needs.
Supporting the government's response to the liquidity and credit crisis.
Helping administer the U.S. Treasury's Troubled Asset Relief Program (TARP) by updating banks and processing 352 TARP applications.

Relationship Building

Bank staff worked with the financial community by meeting with senior executives and experts from financial exchanges, clearinghouses, financial institutions, regulatory agencies and foreign central banks.

Conferences and forums fostered high-quality public policy research and provided an opportunity for dialogue and discussion. These included:

A two-week workshop on money, banking, and payments that brought together leading international experts from academia and po?licy institutions.
The 2008 Payments Conference, which examined payments fraud.
Two leadership conferences that were held in Chicago for Federal Reserve System executives.

Additional information on conferences sponsored by the Chicago Fed appears in the main article of this annual report.

Community Outreach

Efforts to work with community groups, government agencies and businesses, as well as educate the public and inform policy decisions, included:

Continuing to assist borrowers confronting foreclosure via the Home Ownership Preservation Initiative (HOPI), a partnership of Neighborhood Housing Services of Chicago and the City of Chicago.
Launching regional HOPI efforts to help mitigate foreclosure problems across the wider Chicago metropolitan area, with discussions focusing on how best to allocate new federal funds targeted for foreclosure issues.
Sponsoring teacher workshops to help educators teach students about the economy and the Federal Reserve.
Introducing an economic education blog and distributing an educational video to more than 850 high school teachers.
Offering 30 high school teams and 23 college teams the opportunity to participate in the Fed Challenge competition.
Hosting almost 40,000 visitors at the Bank's Money Museum.

For information about Money Smart Week, a related outreach program, see the main article of this annual report.

Federal Reserve Operations

The Bank's internal operation areas maintained high levels of performance. Key performance and control measures were successfully met while staff adjusted to changing volumes.

Discount Window

Bank staff implemented and administered new Discount Window programs, such as the Term Auction Facility (TAF) introduced in December 2007. Staff members successfully managed the increased Discount Window volume and related collateral arrangement activity. They also supported other Reserve Banks in the administration of special lending programs.

Customer Relations & Support Office

The Customer Relations and Support Office (CRSO) achieved its 2008 high-priority objectives, customer-focused service agreement goals, National Account Program and System revenue targets, and the Electronic Access cost-recovery target.

The CRSO successfully achieved all interim goals in 2008 for converting customers to an Internet-based FedLine connection environment by early 2009.

The Electronic Access Customer Contact Center focused efforts on reducing costs and gaining efficiencies through a number of strategic tools and technologies, including self-service tools and virtual call center technology.

Financial Services

Cash operations met all key performance goals.

Check and Check Adjustments maintained strong performance levels in 2008, meeting all productivity, cost, quality and float targets.

Sales staff played a vital role in selling, implementing and supporting electronic check products, completing 849 FedReceipt/FedReceipt Plus implementations.

Implementation of the National Check Restructuring Program continued, as did preparation for planned office consolidations.