Review

The adjusted monetary base is designed to be a single measure of all Federal Reserve actions that influence the money stock, including effects of changes in reserve requirements. It is equal to the source base plus a reserve adjustment magnitude (RAM) that accounts for changes in reserve requirements by the Federal Reserve.

The Federal Reserve Bank of St. Louis recently announced a new measure of the adjusted monetary base. Complications arising from the implementation of reserve requirements mandated by the Monetary Control Act of 1980 and changes in the reporting of deposits at financial institutions were responsible for the development of this new adjusted monetary base (AMB) measure.