Federal Reserve notes

Federal Reserve notes - The Federal Reserve System Board of...

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January 23, 2012 The Federal Reserve System - Board of Governors (in Washington, D.C.) o 7 members, appointed by the US President and confirmed by the US Senate - 12 Regional Federal Reserve Banks o The President of each regional bank is elected by the Bank’s Board of Directors, and approved by the Board of Governors Basic Responsibilities of the Federal Reserve - Monetary Policy (aimed at smoothing business cycles, employment, and GDP) o Influence monetary and credit conditions to attain maximum employment, stable o Objectives The Federal Reserve’s “ dual mandate Promote maximum (sustainable) employment Promote price stability Codified in the Full Employment and Balanced Growth Act (“Humphrey- Hawkins Act”) of 1977 The “dual mandate” and Fed’s independence The Fed is not goal dependent The Fed is instrument independent o Tools that the Federal Reserve employs to reach its objectives Traditional tools New tools implemented during the financial crisis o Monetary Policy Transmission How monetary policy affects the economy o The FOMC and monetary policy decisions Communicating policy and its rationale - Financial Stability o Maintain stability in financial intermediation and address system risks that may arise in the financial markets o Financial Stability Oversight Council (FSOC) - Bank Supervision o Ensure soundness of the banking and financial system - Financial Services o Provide financial services to depository institutions, the US government and foreign institutions o Major role in the operation of the nation’s payments system Objectives: Maximum (Sustainable) Employment
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This note was uploaded on 01/23/2012 for the course ECON 301 taught by Professor Hassan during the Spring '08 term at Rutgers.

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Federal Reserve notes - The Federal Reserve System Board of...

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