John M. Pachkowski, J.D., Editor, CCH Federal Banking Law Reporter and Bank Digest; Author, Anti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act; Co-Author CCH Financial Privacy Law Guide. As reported in the Oct. 15, 2009, New York Times, the recently-released minutes of the Sept. 22-23 meeting of the Federal Open Market Committee indicated a debate among FMOC members regarding the Federal Reserve Board’s program to purchase Treasury securities, agency debt and agency mortgage-backed securities (MBS). According to the minutes, the FOMC members observed that the rate of new purchases could have an effect on asset prices, especially of MBS; and that a gradual reduction in the pace at which the Fed buys agency debt and agency MBS could help promote a smooth transition in markets as the announced asset purchases are completed. Some committee members suggested tapering quickly and completing the purchases by year-end, while a few preferred slowing the rate of purchases over a longer period in order to maintain flexibility regarding the pace and the cumulative amount purchased and thus potentially better calibrate the programs to evolving economic and financial market conditions. Most members, however, supported extending purchases of agency debt and agency MBS through the first quarter of 2010.


