LeoGlossary: System Open Market Account (SOMA)

The Federal Reserve System Open Market Account (SOMA) contains dollar-denominated assets acquired through open market operations. These securities serve several purposes.

They are:

  • collateral for U.S. currency in circulation and other liabilities on the Federal Reserve System’s balance sheet;
  • a tool for the Federal Reserve’s management of reserve balances; and
  • a tool for achieving the Federal Reserve’s macroeconomic objectives.
  • The New York Fed has been selected by the Federal Open Market Committee (FOMC) as the Reserve Bank that executes transactions for the SOMA. SOMA holdings are allocated to each of the Reserve Banks on a percentage basis.

The SOMA also contains the Federal Reserve's foreign currency reserves, which are currently held in investments denominated in euros and Japanese yen.

On March 27, 2020 the New York Fed began purchases of agency commercial mortgage-backed securities (agency CMBS) for the SOMA.

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