Federal Reserve pays a key role in it's involvement in financial markets. It does have limitations for how involved the Reserve can get, for being to much involved can result in a monopoly threatening smaller institutions and inflating the market, which could eventually cause a recession or a decline in the market. What many people see is the most important role of the Federal Reserve is it's backing of payment promises from smaller institutions all over the country. The Reserve backs these payments in order to "promote the integrity and efficiency of the payments mechanism and to ensure the provision of payment services to all depository institutions on an equitable basis, and to do so in an atmosphere of competitive fairness," (Federal reserve Bulletin 1990). Through it's backing of payments, the Federal Reserve has not only protected thousands of individuals and their money, but has also helped stimulate financial growth all over the nation as well.
Question 2.
There are several interesting factors regarding the structure and purpose of the United States Federal Reserve. One is that it is split between a privately held, and publicly held institution, meaning that the public has a say in the future of the bank. It might seem strange that despite its central role in government affairs, that it is still somewhat privately owned. There are also regional branches, located in 12 states. This allows the Federal Reserve to protect and stimulate regional economies all over the nation. The Federal Reserve was created in a very unique way which sets it apart from the control of Congress and the Senate. When it was established, the creators wanted to make sure that no administration could have too much control, or to use it for their own good. So the bank was established independent of the Federal Government, running itself. This keeps greedy hands in the Government from reaching too far into the nation's reserves for their own selfish purposes. Congress has recognized that it is an independent financial institution, and therefore with no interests in arty politics or election years.
References
Federal Reserve Bulletin. "The Federal Reserve in the Payments System - Policy
Statement Update." Bnet. http://findarticles.com/p/articles/mi_m4126/is_n5_v76/ai_9038455. May 1990.
What are areas of comparative advantage of the United States and its trading partner? What are the benefits and disadvantages specific to this free trade agreement? The country that was selected which has a trading agreement with the United States is Mexico. The biggest advantages that this is providing to everyone are: increased exports. According to the Office of the U.S. Trade Representative, this is resulting in a sharp rise
Federal Reserve Board [...] history of the Board, and what its purpose is in the United States. The Federal Reserve Board is an integral part of the Federal Reserve System of the United States, and it creates and maintains much of the monitorial policy of the nation. The board members are responsible for the monetary health and security of the country, and so shoulder a huge responsibility to the
Federal Reserve System is. The Federal Reserve System The Federal Reserve serves as the central bank of the United States. It was founded by the Congress in 1913 to serve the function of provide the nation with a secure and committed monetary and financial system. Today the Federal Reserve holds the responsibilities in four areas: (1) conducting the nation's monetary policy; (2) supervising and regulating banking institutions and protecting the credit rights
Alan Greenspan's testimony starts with a comparison between the state of the U.S. economy in July 2004, time of his present testimony, and the state of the economy in February 2004, the time of his previous testimony in front of the U.S. Congress. In February 2004, the main problem of the U.S. economy, as identified by Greenspan, was the fact that the company's increase in income and net profits were related
tactics that the Federal Reserve uses to manage the economy. The Federal Reserve has a mandate to manage the overall health of the economy (usually GDP), the inflation rate and the unemployment rate. To strike the right balance, it utilizes a number of different techniques. The three main ones are open market transactions, the discount rate, and reserve requirements. All three of these can be used as part of
FEDs and MoneyAre CCs and Debit Cards Money?Credit cards and debit cards are not money but are actually considered tools or financial instruments that facilitate transactions in which money is exchanged. Both types of cards represent a convenient way to access and spend funds in a bank account (or made available to one via a line of credit). Because they are accessing different types of accounts, they act differently (Chand,
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now