Lesson+13+The+Federal+Reserve+System+Structure

Lesson+13+The+Federal+Reserve+System+Structure - Lesson 13:...

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Lesson 13: The Federal Reserve System, Transparency and Independence IP—Chapter 9
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Today the Fed’s duties fall into four general areas: Conducting Monetary Policy in pursuit of dual mandate Supervising and regulating banking institutions Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets Providing financial services to banks, the US government and foreign official institutions
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The Federal Reserve System The Federal Reserve System System is headed by the System is headed by the Board of Governors Board of Governors The twelve Federal The twelve Federal Reserve banks are Reserve banks are located throughout the located throughout the nation nation U.S. monetary policy is U.S. monetary policy is determined by the determined by the FOMC FOMC
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Structure of the Federal Reserve
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12 Federal Reserve Districts
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Philadelphia Fed District
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Board of Directors of Federal Reserve Board of Directors of Federal Reserve Bank Bank
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Garry Maddox’s Baseball Card
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Board of Directors of Philadelphia Fed—Who in this photo is a Three-Time National League MVP? Garry Maddox (1973-SFG, 1976 & 1978-Philadelphia Phillies) Currently, President & CEO A. Pomerantz & Company, a Philadelphia-based office furniture company
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The Federal Reserve Banks--Functions Clear checks Issue new currency Withdraw damaged currency from circulation Administer and make discount loans to banks in their districts Evaluate proposed mergers and applications for banks to expand their activities Act as liaisons between the business community and the Federal Reserve System Examine bank holding companies and state-chartered member banks Collect data on local business conditions Use staffs of professional economists to research topics related to the conduct of monetary policy
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Federal Reserve Banks and Monetary Policy Directors “establish” the discount rate Decide which banks can obtain discount loans Five of the 12 bank presidents have a vote in the Federal Open Market Committee (FOMC)—
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Voters and Rotation
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Movement of the personal consumption expenditures inflation rate (excluding food and energy prices) Inflation Rates During Fed Chairmanships
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Member Banks All national banks are required to be members of the Federal Reserve System Commercial banks chartered by states are not required but may choose to be members Depository Institutions Deregulation and Monetary Control Act of 1980 subjected all banks to the same reserve requirements as member banks and gave all banks access to Federal Reserve facilities
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Special Role of the Federal Reserve Bank of New York (FRBNY) FRBNY Executes Monetary Policy FRBNY as agent of the US Treasury conducts US government financing operations FRBNY on instruction of the Treasury executes intervention in foreign market FRBNY provides custody and related
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Lesson+13+The+Federal+Reserve+System+Structure - Lesson 13:...

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