unit 4 essay - Bus Hon Hybrid 101 Unit 4 Essay #1 The...

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Bus Hon Hybrid 101 Unit 4 Essay #1 The Federal Reserve System is the central banking system of the United States, responsible for regulating the banking industry. The Federal Reserve System is a quasi-governmental banking system composed of a presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C. The Fed also includes the Federal Open Market Committee and 12 regional Federal Reserve Banks located in major cities throughout the nation. These Reserve Banks serve as a medium for many banks to have accounts there and then distribute through the reserve system. This is along with 25 Branch Banks that are a smaller step and provide banks with more places to deposit their reserves. There are also numerous private member banks, which own varying amounts of stock in the regional Federal Reserve Banks. Ben Bernanke serves as the current Chairman of the Board of Governors of the Federal Reserve System. Alan Greenspan is the last chairman, that was relieved by Bernanke recently. The Federal Reserve System was created by Congress on December 23, 1913 and its mission is to maintain an economically healthy and financially sound business environment in which banks can operate. It uses monetary policies to put into effect whatever change the main member think will spur or slow down the economy. It may be higher interest rates or a higher reserve. The Fed is controlled by a 7 member board of governors who meet in Washington every 6 weeks or so. Each governor is appointed by the President and confirmed by the senate for a 14 year term. The President also makes 2 of the sever into the chairman and vice-chairman to lead these meetings. The Fed also has four very important jobs, or roles and responsibilities. Their first job is conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. Their second most important job is supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers. Their third job is maintaining the stability of the economy and containing systemic risk that may arise in financial markets. Their final job is providing financial services to depository institutions, the U.S. government, and foreign official institutions. The do all these things and control the money supply by regulating the reserve requirements, the discount rate, and using-open market operations. The Fed regulates the reserve requirements, which is the percentage of its deposits a
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This essay was uploaded on 04/22/2008 for the course BUS 1100 taught by Professor Goodman during the Spring '07 term at College of DuPage.

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unit 4 essay - Bus Hon Hybrid 101 Unit 4 Essay #1 The...

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