Federal Reserve Board is the most powerful financial institution in the country and is actually the Central bank of United States. This institution is responsible for regulating financial system of the country by formulating monetary policies and by changing the fund rates. The Fed is not completely independent and works together with the administration and the Department of the Treasury. It is responsible for formulating and implementing monetary policies in the United States. Even though not independent Federal Reserve has the power to single-handedly introduce appropriate regulations and changes in order to control the financial markets. Federal Bank is commonly referred to as the Fed and it has lately been in the news quite consistently and persistently. The headline-making monetary measures have made the public take notice of the way monetary system works in the United States.
USA Business in its (1995) issue wrote, "The Fed exercises control over money and financial markets using a limited range of indirect tools: open market operations, discount rates, reserve requirements, and margin requirements. Open market operations - consisting of the buying or selling of U.S. government securities, usually on a short-term temporary basis, to either reduce or increase the amount of free cash in the system - are the most frequently used means of fine-tuning financial activity."
The activities of Federal Reserve...
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