Federal Reserve Paper
April 12, 2011
Regulations can be defined as rules, procedure and laws set by government agencies in
order to achieve its objectives. In the financial industry, it is set by the Federal Reserve and all
banks are required to abide by them as well as keeping them all in unison.
This helps regulate
the practices of all banking and lending institution.
The primary purpose of banking regulations
is that it protects individual consumers against banking and lending practices that are deceptive
and can potentially harm or violate individual privacy rights.
The Federal Reserve which sometimes can be referred to Central Bank is one of the
country’s most powerful economic institutions.
The Federal Reserve is relevant for Congress
not only because the Constitution gives monetary powers to congress but also because congress
created the Fed and, therefore, has critically important responsibilities for Federal Reserve
The Federal Reserve and monetary policy is very important in the financial markets
because it influences interest rates and stabilizes the financial system.
The important of the
Federal Reserve cannot be overemphasized.
The functions are important because the Federal
Reserve is responsible for the management of total spending as well as inflation.
The Federal Reserve function also influences foreign exchange rates and other market
In times of financial crises, the Fed stabilizes the entire financial system.
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