#1
14th November 2015, 12:17 PM
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How Does The Federal Reserve Bank System Work
I am MBA final year student and making project report on the topic Federal Reserve Bank System. Will you please provide me the working of this Federal Reserve Bank System and also tell me what the component and structure of this system?
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#2
14th November 2015, 12:17 PM
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Re: How Does The Federal Reserve Bank System Work
The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created on December 23, 1913. Workings: Functions of Federal Reserve Bank System: To address the problem of banking panics To serve as the central bank for the United States To strike a balance between private interests of banks and the centralized responsibility of government To supervise and regulate banking institutions To protect the credit rights of consumers To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of To maintain the stability of the financial system and contain systemic risk in financial markets Components: It has four components: 1 A seven-member Board of Governors that direct monetary policy. 2 12-member Federal Open Market Committee (FOMC) that sets the target for the Fed funds rate, which guides interest rates. All Board members sit on the FOMC. 3 Twelve regional member banks, located throughout the U.S., that supervise commercial banks and implement monetary policy. 4 Staff economists who provide reports including the Beige Book and the Monetary Report to Congress. The Federal Reserve oversees roughly 5,000 bank holding companies, 850 state bank members of the Federal Reserve Banking System, and any foreign banks operating in the United States. The Structure of the Federal Reserve System 1-Board of Governors 2-Open Market 3-Reserve Banks 4-Board of Directors |