WASHINGTON -- The Federal Reserve Board will boost its annual budget by 4.2% for next year, the lowest increase since 1987.
The $143 million budget compares with $137 million this year.
"I think this is the right approach," said Vice Chairman David W. Mullins during a meeting last Wednesday. It is "a bare-bones budget approach."
In 1994, the Fed Board plans to hire 16 staff members. Half of them will help with the ongoing implementation of the 1991 banking reform law and five will process Home Mortgage Disclosure Act data. Three positions have been eliminated, so the Fed will have 1,708 staff members in 1994, 13 more than in 1993.
Comments on Antitrust Law
About $2 million of the budget will go toward merit pay increases of 2.5% on average.
In other action, the board voted to invite comments on a proposed review of the Depository Institution Management Interlocks Act, an antitrust law.
The purpose would be to simplify the act and "promote competition without the risk of fostering anticompetitive practices," according to Federal Reserve Board documents. Any changes would apply to state member banks and bank holding companies.
In addition to the review, the Fed specifically proposed exempting institutions that between them control less than 20% of a community's deposits from the rules that prohibit them from sharing management.
"The board believes that these exemptions are pro-competitive," the Federal Register notice reads. The proposal "enlarges the pool of management talent upon which they may draw."
The Fed also approved a 5% increase, to $3 million, for the Fed's Office of Inspector General's annual budget. All governors except Wayne D. Angell voted for the appropriation.
Several warned the Inspector General's office that they were concerned about how the independent office spends its money because about 10% of its budget is spent investigating fraud, while the rest is spent reviewing management issues.