Private Sector Adjustment Factor - PSAF

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.

BREAKING DOWN '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. Fedwire

    A real-time gross settlement system (RTGS) of central bank money ...
  2. Clearing House Interbank Payments ...

    The primary clearing house in the U.S. for large banking transactions. ...
  3. Imputed Cost

    A cost that is incurred by virtue of using an asset instead of ...
  4. Euro Feds

    A federal wire transmission advancing funds in Eurodollars from ...
  5. Authorized Settlement Agent

    A bank that is authorized to submit checks and other cash items ...
  6. Regulation J

    A regulation set forth by the Federal Reserve. Regulation J establishes ...
Related Articles
  1. Economics

    What Do the Federal Reserve Banks Do?

    These 12 regional banks are involved with four general tasks: formulate monetary policy, supervise financial institutions, facilitate government policy and provide payment services.
  2. Personal Finance

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  3. Personal Finance

    The Banking System: Federal Reserve System

    ByStephen D. Simpson, CFA The central bank of the United States is the Federal Reserve System. The Federal Reserve System came into being in 1913, after the passage of the Federal Reserve Act ...
  4. Economics

    The Federal Reserve: Monetary Policy

    The term monetary policy refers to the actions that the Federal Reserve undertakes to influence the amount of money and credit in the U.S. economy. Changes to the amount of money and credit affect ...
  5. Forex

    The Fed

    The Fed's role on interest rates and the forex market
  6. Economics

    The Federal Reserve: Duties

    The Fed's mandate is "to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates."In ...
  7. Professionals

    Monetary Policy

    FINRA Series 6 Exam Study Guide - Monetary Policy. In this section, Monetary policy tools, money supply and interest rates. The role of the federal reserve board in monetary policy.
  8. Economics

    Regional Banks Give The Fed A National Perspective

    We all know that the Federal Reserve utilizes monetary policy to control the economy, but what do the 12 regional Federal Reserve Banks do?
  9. Economics

    The Federal Reserve: What Is The Fed?

    The Federal Reserve was created by the U.S. Congress in 1913. Before that, the U.S. lacked any formal organization for studying and implementing monetary policy. Consequently markets were often ...
  10. Economics

    Explaining the Federal Reserve System

    The Federal Reserve System is the central bank of the United States. It regulates monetary policy and supervises the nation’s banking system.
RELATED FAQS
  1. How does the Private Sector Adjustment Factor (PSAF) affect competition in the private-sector?

    Look at a simple breakdown of the Private Sector Adjustment Factor (PSAF), set by the Federal Reserve to recover imputed ... Read Answer >>
  2. What do banks do to control the bank reserve?

    Understand what the Federal Reserve does in order to expand or contract the economy. Learn what depository institutions can ... Read Answer >>
  3. Who controls the Federal Reserve Bank?

    Read about the ownership and control of the Federal Reserve, the most powerful financial institution in the world and the ... Read Answer >>
  4. Who determines the reserve ratio?

    Understand what the Federal Reserve is and what it regulates in the U.S. economy. Learn about the reserve ratio and how the ... Read Answer >>
  5. What distinguishes the financial services sector from the banks?

    Learn about the difference between the banking industry and the financial services sector and how to distinguish financial ... Read Answer >>
  6. Why would the Federal Reserve change the reserve ratio?

    Understand the Federal Reserve's monetary policy and the tools it uses to change that monetary policy. Learn about the reserve ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center