Unformatted text preview: 3. M ember banks; All commercial banks chartered
by OCC are members.
Many state charted banks are also members.
4. Federal Open Market Committee (FOMC)
a. The policy making body
b. V oting m
Voting embers: Board of Governors and 5
presidents from the 12 banks (12). President of NY
Fed is always a member.
Fed Dr. David P. Echevarria All Rights Reserved 4 GOALS OF MONETARY
A. Stable prices
1. Inflation measures: Consumer Price Index
(CPI) 2. Inflation drives values of financial assets
down, real assets up.
B. Full employment
1. Supply of credit and capital (currency) C. Funding economic growth
1. Assure financial market stability
2. Liquidity supplier of last resort (Bear Stearns, others)
Dr. David P. Echevarria All Rights Reserved 5 GOALS OF MONETARY
D. Supervisory powers over member banks
3. Auditing and Compliance
Chartering and Capital Requirements
ents (1980: DIDMCA) Type of liability Percent of
Liabilities Net transaction accounts (7-days) Effective date $0 to $10....
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- Fall '09
- Monetary Policy, Federal Reserve System, Dr. David P. Echevarria, P. Echevarria