Private Sector Adjustment Factor - PSAF

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DEFINITION of 'Private Sector Adjustment Factor - PSAF'

A method used by the Federal Reserve Board for calculating the costs of Federal Reserve banks providing services to depository institutions. The services provided include checks, Automated Clearing House, Fedwire funds and Fedwire securities.

The Monetary Control Act of 1980 requires the Fed to recover both the direct and indirect costs of providing these services plus the imputed costs that would have been incurred if the services were provided by the private sector.

INVESTOPEDIA EXPLAINS 'Private Sector Adjustment Factor - PSAF'

The Fed reviews its PSAF methodology periodically to make sure it is current with changes in the banking industry. In 2009, the Fed considered changing the current correspondent-bank model underlying the PSAF calculation.

RELATED TERMS
  1. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  2. Private Sector

    The part of the economy that is not state controlled, and is ...
  3. Monetary Control Act

    Title 1 of a two-title act passed in 1980 that represented the ...
  4. Depository Institutions Act of ...

    A law passed by Congress with the intent of making savings and ...
  5. Fedwire

    A real-time gross settlement system (RTGS) of central bank money ...
  6. Federal Reserve Board - FRB

    The governing body of the Federal Reserve System. The seven members ...
RELATED FAQS
  1. How does the Private Sector Adjustment Factor (PSAF) affect competition in the private-sector?

    There's no sure way of evaluating the real impact of the private sector adjustment factor (PSAF) on the competitiveness of ... Read Full Answer >>
  2. What is the difference between a write-off and a writedown?

    In terms of accounting, a write-down is performed to reduce the value of an asset to offset a loss or expense. A write-down ... Read Full Answer >>
  3. Why is the employment figure important to a "dove"

    The employment figure is important to doves, because they are primarily concerned with the health of the labor market. Doves ... Read Full Answer >>
  4. What are the goals of a "dove" Federal Reserve head?

    The goals of a dovish Federal Reserve head are to maintain low interest rates, stimulate the overall economy, decrease the ... Read Full Answer >>
  5. What are some good online resources for me to learn about Generally Accepted Accounting ...

    The two definitive authorities on developing and interpreting the U.S. generally accepted accounting principles, or GAAP, ... Read Full Answer >>
  6. What is the opposite of a "dove"?

    A dove is an economic policy adviser who favors maintaining low interest rates in hopes of stimulating the economy, while ... Read Full Answer >>
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