While taking the course Macroeconomics and the Global Economic Environment, first-year executive MBA student Karen Chan thought her Wharton | San Francisco classmates might enjoy a tour of her organization, the Federal Reserve Bank of San Francisco. We asked Karen, a supervisory analyst, to tell us about that tour. Here’s what she said:
In Macroeconomics, we talked a lot about concepts such as money supply, pricing, interest rates, and inflation. We looked at how Fed policy affects all aspects of the economy and financial markets. I thought it would be interesting to offer my classmates a tour of our local Federal Reserve Bank as an accompaniment to that course.
The Fed offers tours to the public so the tour wasn’t difficult to arrange. However, there is a section of the tour that you can only see with an employee escort: the cash vault in the basement, a highly secure area with “man-trap” doors and hundreds of security cameras. This is where the Cash Product Office of the Fed conducts its operations – pallets of currency are shipped in and then distributed to area banks, after being monitored for authenticity and quality, and ensured that it is fit for commerce. Our Fed tour guide escorted us to the basement vault, where we began our tour.
When we visited, there were probably billions of dollars in the vault. One pallet measured 4X4X4 feet and was comprised of $100 bills, totaling $46 million in cash. It’s an impressive sight to see the scale of the cash operations. It’s usually a bit mysterious to most people who aren’t aware of how currency orders are filled and then delivered to depository institutions.
Next, we visited the cash counting operation where currency is inspected for authenticity and quality, and then sorted and bundled into specific denominations, before we headed up to the ground floor to the Currency Exhibit. This is where we have a collection of real currency dating back 250 years, one of the most comprehensive collections of U.S. currency in the world. You can see bills issued for each decade of American history – even dating back to the American Revolution and Civil War. We saw a few remarkable bills like the “Grand Watermelon” note which is a $1,000 Treasury note on which the zeroes are shaped and colored like watermelons. We also saw a few bills signed by Paul Revere, who was an engraver.
Afterward, we went to the Fed Center, a permanent installation at the San Francisco Fed, which is designed to teach the public about the functions of the central bank through a series of hands-on exhibits. We pulled levers and pushed buttons on the various interactive exhibits to learn about economic and financial concepts like interest rates, unemployment, and banking supervision and regulation. At the end of the tour, each student received a little bag of shredded cash as a souvenir.
Seeing where EMBA students work and what they do on a daily basis is a wonderful way to complement the curriculum. The day after our tour, Prof. Andrew Abel gave a lecture in our Macroeconomics class on the Federal Reserve System (perfectly timed!). He discussed the history and the structure of the Fed along with an overview of its operations and functions.
Now that we’ve toured the Fed in San Francisco and Boeing in Seattle (thanks to another student), I’m looking forward to more opportunities to visit my classmates’ places of employment. In addition to being educational, it’s fun spending time together outside of class.