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In Finance, what is a Green Book?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 10 December 2016
  • Copyright Protected:
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    Conjecture Corporation
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The term “Green Book” is used in several different ways in the financial world. One example is the series of guidelines published by the United States Treasury to provide information about how to use the Automated Clearing House (ACH) system for electronic transfers and payments. Another is the Green Book published by the Federal Reserve to provide information for members of the Federal Open Market Committee (FOMC) during its periodic meetings. Green Books are also published by several professional organizations for various purposes, such as listing members or providing position statements.

In the case of the Green Book published by the Treasury, the volume includes complete and detailed information about how to use the ACH system. It covers the proper procedures for making transfers, as well as an overview of how the system works and how it is used. Banks must follow these procedures for transfers to go through correctly, with the book providing a standardized series of instructions to follow. This is designed to reduce the risk of errors and to make it easier to monitor financial institutions for compliance.

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Sections in this text cover how to enroll in the ACH, processing payments, returns, what do to in the event of non-receipt, and how people will be notified of changes in the ACH system. The Green Book also includes contact information and a glossary for the benefit of users. New editions are periodically issued and can be ordered from the Treasury. Sections are also sometimes posted online for easy reference.

In the Federal Reserve, the Green Book is one of several books, including the Blue Book and the Beige Book, that is used to provide information to the FOMC. This particular volume discusses projections for the market. Economic forecasting is important for setting monetary policy, as members can take steps to encourage or avert certain economic events by engaging in open market activities.

The Green Book is not made available to members of the public. It is intended for internal use only and can contain confidential and sensitive information. Green Books are distributed to members six days in advance of the meeting after being prepared by members of the staff. Archival versions of old books are available for examination, although segments may be redacted for security and confidentiality reasons. The books contain overviews of the US and global economies, along with projections and predictions that are designed to provide information about the future direction of the market.

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