Ben S Bernanke: Dedication of the new Federal Reserve Bank of Kansas City
Building
Speech by Mr Ben S Bernanke, Chairman of the Board of Governors of the US Federal
Reserve System, at the Federal Reserve Bank of Kansas City, Kansas City, Missouri,
12 June 2008.
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It is my pleasure to be here today to help dedicate this state-of-the-art facility. President
Hoenig, I commend you and your staff, as well as the designers and builders, of this
impressive structure. It will serve Kansas City and the entire 10th District well.
Permit me to start with a bit of history that I hope will underscore the crucial role played by
the regional Reserve Banks. When the Federal Reserve was created in 1913, it was the
nation's third attempt at a central bank. The First Bank of the United States, chartered in
1791, and the Second Bank of the United States, chartered in 1816, did not last. They both
failed to gain the trust of a public fearful of concentrated power. To address this concern, the
creators of the Federal Reserve crafted a plan for a central bank with a unique structure:
what some have called a decentralized central bank.
An independent federal agency in Washington, D.C., the Board of Governors of the Federal
Reserve System oversees 12 regional Banks, which serve as the operating arms of the
System and blend public and private elements. Importantly, the presidents of the Reserve
Banks participate, along with the Washington-based Board members, in the monetary policy
deliberations of the Federal Open Market Committee. The presidents bring a wealth of
knowledge acquired from their regional contacts. Thus, in making policy, we are able to view
the economy not just from a Washington perspective, or a Wall Street perspective, but also
from a Main Street perspective. This system has served the central bank and the nation well
for nearly a century.
Last night I attended a dinner with the Bank's current directors as well as many former
members of the Bank's board. Nationally, 278 private citizens - including business people,
bankers, nonprofit executives, and community, agricultural and labor leaders - serve on the
boards of our 12 Banks and their Branches. These individuals provide us with extensive and
current information about economic conditions from a unique local perspective. Often, they
provide an early warning of shifting economic conditions before they show up in official
government statistics. I commend them for their service to both the central bank and our
nation.
Here in Kansas City, and in all of our Districts, the Bank and Branch directors have played an
important role since the Federal Reserve's inception. As you might expect, at last night's
dinner, we talked to some degree about the Bank's history, our current challenges, and the
future. In preparing for this event, I read a little bit about the dedication ceremony for the
previous Kansas City Fed headquarters at 925 Grand Boulevard. One of my predecessors
as Chairman, William P.G. Harding, spoke at its dedication on November 16, 1921, and I am
happy to follow in his footsteps.
Considering the Federal Reserve's history, this location is a most appropriate site for a
Federal Reserve Bank, with its new neighbor being the National World War I Museum at
Liberty Memorial. Those who have an appreciation of U.S. history know that the Federal
Reserve played an important role in support of the funding of the First World War and that
the war forced the early Federal Reserve to contend with an uncertain global environment
with wide-ranging monetary and economic ramifications. The Federal Reserve has faced
many such challenges since its founding, and the System has evolved in response. Ours
must be a dynamic institution if it is to successfully fulfill its mission in a changing financial
and economic landscape.
When the Federal Reserve Bank of Kansas City opened in 1914, it operated out of leased
office space before moving to the building it is now vacating. In the more than nine decades
since, the world has changed dramatically, especially in the areas of banking and finance;
however, the Federal Reserve's purpose, mission, and goals remain unchanged. And while
the Bank's former home on Grand Boulevard served it well, today we celebrate the opening
of a building that will well serve this country, and this region.
Looking at the Federal Reserve more broadly, while we must continue to change, we also
must recognize that one of the Federal Reserve's key strengths continues to be the strong
regional connections fostered by the Reserve Banks. To quote from the Federal Reserve
Board's first annual report, published on January 15, 1915: "It should never be lost to sight
that the Reserve Banks are invested with much of the quality of a public trust. They were
created because of the existence of certain common needs and interests, and they should be
administered for the common welfare - for the good of all."
In that spirit, let us use this ceremony to recognize the Federal Reserve's unique structure
with roots that are broad and deep in the region. To echo comments Tom Hoenig made at
the groundbreaking on this site three years ago, let us dedicate this Bank to the service of
our nation, this great city of Kansas City, and the other important cities, towns, and rural
regions in the heart of America that define the 10th Federal Reserve District.