Federal Reserve Bank of New York

The Federal Reserve Bank of New York is one of 12 regional Reserve Banks which, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Fed, as the system is commonly called, is an independent governmental entity created by Congress in 1913 to serve as the central bank of the United States. It is responsible for
· formulating and executing monetary policy,
· supervising and regulating depository institutions,
· providing an elastic currency,
· assisting the federal government in its financing operations, and serving as the banker for
the U.S. government.

In addition, the Federal Reserve System has important roles in operating the nation's payments systems, protecting consumers' rights in their dealings with banks and promoting individual community development and reinvestment.




The New York Fed oversees the Second Federal Reserve District, which includes New York State, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico and the U.S. Virgin Islands. Though it serves a geographically small area compared with those of other Federal Reserve Banks, the New York Fed is the largest Reserve Bank in terms of assets and volume of activity.

The New York Fed (as it is commonly referred to) has several unique responsibilities, including conducting open market operations, intervening in foreign exchange markets, and storing gold for foreign central banks, governments and international agencies. Foremost among its functions is the implementation of monetary policy. The other two missions are supervision and regulation and international operations. http://www.newyorkfed.org/aboutthefed/whatwedo.html


STUDENT EXPERIENCE:
Yael Port ‘13

In the summer of 2011, I worked for The Enforcement, Litigation, Protection and Investigations Division of the Federal Reserve Bank of New York. This department has attorneys, investigators and staff handling litigation in which the Bank has an interest. In addition, this Division pursues regulatory enforcement investigations and formal actions under authority delegated by the Board of Governors. The Division is also responsible for conducting internal investigations in the Bank as well as having the responsibility of overseeing the Federal Reserve Law Enforcement Unit, which entails providing training and legal support for the law enforcement officers.

When interviewing for the position last year, I had mentioned that I have an interest in international law, but I did not think that would make a difference in my assignments. When I arrived, however, I found out that my mentor had saved an international tax law case for me to work on. It started out simple: looking through memoranda of understanding, finding applicable cases on Westlaw and LexisNexis, researching international standards, etc. I soon realized, however, that in order to write my memo I would have to draw on a variety of skills, some of which I would need to learn.

It was not easy at first, and I spent some time googling every possible permutation of my research terms to get a better idea of the big picture. I asked the librarians in residence for help, and they pointed me in the right direction. I learned how to find treaties using the Library of Congress and how to check their status via the United Nations. I discovered how problems arise when one country or organization has ratified a treaty but the other has yet to do so. For example, treaties often include new provisions that completely replace sections of an older treaty. One contracting state may ratify the treaty right away, but another country could take a long time to review it. If a dispute arises during that time, each country will likely claim to be bound by the version of the treaty that is most favorable to it, even the treaty itself contains a provision specifying that it does not come into effect until all parties have ratified it.

Additionally, I analyzed bilateral tax treaties in conjunction with a particular country’s tax laws in order to find ways for privileged information to be exchanged in cases of possible tax evasion and/or fraudulent activity. Furthermore, I examined not only the tax treaties and tax laws, but I also tried to tie in with the particular fact pattern at issue the relevant international guidelines, such as the Organization for Economic Co-operation and Development (OECD) Model Tax Treaty, so that I could come up witha favorable definition of tax fraud for the scenario at hand.

Ultimately, one of the most important things I learned over the summer is that bilateral agreements are only as strong as the existing relationship between the contracting states. It seems obvious now, but before I spent my summer analyzing them, I had the idea that treaties existed separately from everyday diplomacy and cross-country relations. It seemed to me that once written, signed, and ratified a treaty was binding. Now I know that while that may be true, treaties may not be executed fully if the relationship between the two states is strained or tenuous. A country may seek to act under a treaty, particularly one that is outdated and likely to be replaced, in order to persuade another state to act a certain way. It may even delay negotiations on a new treaty or amending protocol because it knows that the current treaty has become unfavorable to both sides and so it is unlikely that the other contracting state will execute the treaty against it.

It was an amazing and incredibly eye opening experience to learn about how countries actually interact with each other and how such interaction is influenced by third parties such as international or regional policy organizations. Thanks to my summer experience, my international research skills are much better than before, and I have become an expert on tax treaties!

Yael Port can be reached at yael.port@brooklaw.edu