This is the interest rate that banks lend their balances on at the Federal Reserve to other banks. It exercises this control by influencing the demand for and supply of these balances through the following means: Open market operations -- the purchase or sale of securities, primarily U.S. Treasury securities, in the open market to influence the level of balances that depository institutions hold at the Federal Reserve Banks (The

During most of the last 20 years (from August 1987 to January 2006), the Fed was headed by Alan Greenspan whose personal economic philosophy to a large extent guided the Fed's actions. One of the features of the Federal Reserve's "accommodative" policies was encouraging low interest rates, which was partly responsible for the longest period of economic expansion in U.S. history in the 1990s. Assessment of the Efficacy of the

" (Structure of the Federal Reserve System) The 12 Federal Reserve Banks extend banking service to the depository institutions and also to the federal government. To the financial institutions it takes the responsibility of maintaining reserve and clearing out accounts and entails various payment services incorporating checks, electronically transferring funds and circulating and receiving coins and currency notes. As the banker of the Federal Government they function as fiscal agents. They

Their basis of criticism is that it had very expansionary monetary policy in the early days that gave room for misallocation of various capital resources. This lead to various undesirable economic scenarios such as the support of a massive stock price bubble. It has been argued that even though the Federal reserve did not cause the Great depression, it mitigated it through the unnecessary contraction of the money supply

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

United States Federal Reserve System: The Federal Reserve System or the Fed was established by President Wilson in December 1913 to promote the development of a stable, flexible, and safer financial system in the country. President Wilson enacted the Federal Reserve Act, which was a conclusion of the findings of a commission that was mandated with the task of examining the 1907 severe bank panic. Since its inception, the Federal Reserve