Federal Reserve Functions

Thomas Trivette & Joe beeson

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

Federal Reserve Functions

  • Regulates monetary policy- tight money is when less money is available at higher interest rates. loose money is when money is available at lower interest rates.
  • Participates in open market activities- government securities are sold at a discount but are rodemend for face value on the maturity date.
  • reserve requirements-
  • standards for consumers- sets limits for loans and invesrment by member banks
  • supplies currency-money is a medium of exchange for value
  • supervise and regulates banks-sets resereve requirements. member banks are required to keep certain percentage of all deposits in the banks vaulto on the deposit with the district federal reserve bank.
  • lending standards-sets limits for loans and invesrment by member banks