About The Fed....
The Fed Is a centeralized banking system .
- The purpose of the Fed is to establish and maintain confidence in the US monetary system, to make sure to have a safe, stable, and healthy economy, and to monitor and regulate member banks and help serve the public efficiently.
Logo For Federal Reserve
The Federal Reserve
The Dollar Bill
The Functions of The Fed.....
- Set reserve requirements
- Audits memeber banks
- Approves bank mergers
- The Fed acts as a Agent of Federal Government. It holds a checking account for the U.S. Treasury.
- Fed regulates monetary policy, Federal Reserve influences money and credit condtions in the economy to accomplish economic goals.
- Fed lends money to member banks.
- Fed acts as a clearing house. Clears/settles checks for member banks.
- Fed works in open market operations by selling and buying government securities.
- Open Market Operations- Government securities are sold at a discount but are redeemed got face value on the maturity date.
- Goverment Securities include Savings bonds, short-term obligation of the US Treasury and long-term obligations of the US Tresury
- Bank Discount rates ecourages borrowinf by member banks and so it encourages borrowing by consumers.
- Sets standards for consumer legislation dealing with leading and credit, it also sets limits for loans and investment by member banks.
- The medium of exchange for value is money. US money is currency and coins.
- Fed supplies paper currency.
- Paper currency supplied is "Federal Reserve Notes" currency, like on dollar bills.