Chapter 3 central banks and the federa the fed and

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Unformatted text preview: tary Policy Directors  establish the discount rate Decide which banks can obtain discount loans Directors select one commercial banker from each district to serve on the Federal Advisory Council which consults with the Board of Governors and provides information to help conduct monetary policy Five of the 12 bank presidents have a vote in the Federal Open Market Committee (FOMC) 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 Board of Governors Seven members headquartered in Washington, D.C. Appointed by the president and conrmed by the Senate 14-year non-renewable term Required to come from dierent districts Chairpersonis chosen from the governors and serves four-year term Duties of the Board of Governors Votes on conduct of open market operations Sets reserve requirements Controls the discount rate through  review and determination process Sets margin requirements Sets salaries of president and ocers of each Federal Reserve Bank and reviews each bank's budget Duties of the Board of Governors Approves bank mergers and applications for new activities Species the permissible activities of bank holding companies Supervises the activities of foreign bank...
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