Macroeconomics Notes 3-24-08

Macroeconomics Notes 3-24-08 - would be a regulator of the...

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Macroeconomics Notes 3-24-08 Alexander Hamilton proposed that the first central bank be created. First six presidents believed in democracy but not in the democracy that are known to us today. Democracy was only those higher up in ranking, to higher classes, etc. Andrew Jackson (7 th president) – democracy should be for everybody. Created the spoil system (reward & punish those who support & don’t support you). Deposited money into pep banks or also called wild cat banks. Deposit of money is important because it gives these firms resources. Era of free banking – no regulations and banks could do what they wish. National Banking Act – can continue to distribute currency but have to buy bonds & pay taxes to back up money that is created/distributed. Green bags – money that was not backed by any assets other than strength of the economy. J.P. Morgan – argued that US needed to set up a bank like the bank of England, that
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Unformatted text preview: would be a regulator of the system & a regulator of the money supply. 1970s: FRB (Federal Reserve Bank) CC ( State FDIC FSLIC NCUA Three Sub parts: Com – business S+L – Housing, mortgages, etc. Credit Unions – small institutions that made small loans. FRB (Federal reserved) – established in 1913. involves several parts-first part is elected board of governors-is an independent entity. Federal Open Market Committee (FOMC) – policy body of the federal reserve Federal Advisory Committee (FAC) – Under FRB include *real banks* starting at Boston and ending at san Francisco and then the under these are commercial banks. What the FRB does? -Regulate banking system-Monetary Policy-Fiscal Agent for the federal government. -Clearing House – entity that makes sure a check/bank is honored. -Educational Role – publish magazines, etc....
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