Federal Reserve System
Saint Leo’s University THE FEDERAL RESERVE SYSTEM Economics Joan Mierzwa June 21, 2000 THE FEDERAL RESERVE SYSTEM CONTENTS I. INTRODUCTION 4 II. Federal Reserve System-Overview 5 III. History of the Federal Reserve Act and Amendments to 8 IV. Structure of the System 9 V. Board of Governors 10 VI. Monetary Policy and Effects of on the Economy 12 VII. Final Thoughts SELECTED BIBLIOGRAPHY n INTRODUCTION Why do a report on the Federal Reserve System? This is a question I went over in my head while making a decision on the type of report to do, and what I wanted to learn more about and why. Over the past few years I have realized the impact that the Federal Government has on our economy, yet I never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to my attention, especially since I see inflation, gas prices, and interest rates on the rise. It has given me a better understanding of the affect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, I decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the mo . . .
Over the years its role in banking and the economy has expanded. Monetary Policy and Effects of on the Economy Using tools of monetary policy, the Federal Reserve can affect the volume of money and credit and their price-interest rates. The implications of changes in interest rates extend beyond domestic money and credit markets. · Reserve requirements-requirements regarding the amount of funds that commercial banks and other depository institutions must hold in reserve against deposits. A Washington staff of about 1,700 supports the Board of Governors. A rise in short-term rates that is expected to continue will lead to a rise in long-term rates. The Federal Reserve also plays a major role in the supervision and regulation of the U. The entire System is subject to oversight by the United States Congress because the Constitution gives to Congress, the power to coin money and its value-a power that, in the 1913 act, Congress itself delegated to the Federal Reserve. The money supply may also be influenced through manipulation of the discount rate, which is the rate if interest charged by the Federal Reserve banks on short-term secured loans to member banks. The Federal Reserve banks are located in Boston, New York, Philadelphia, Chicago, San Francisco, Cleveland, Ohio; Richmond, Virginia; Atlanta, Georgia; Saint Louis, Mo. Banking supervision-the examination of institutions for safety and soundness and for compliance with law-is shared with the Office of the Comptroller of the Currency, which supervises national banks and the Federal Deposit Insurance Corporation, which supervises state banks that are not members of the Federal Reserve System. Congress defines the primary objectives of national economic policy in two of these acts: the Employment Act of 1946 and the Full Employment and Balanced Growth Act of 1946. The Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government, and thus the description of the System as “independent within the government” is more accurate. goods are reduced as Americans are induced to substitute goods from abroad for those produced in the United States and people abroad are induced to buy fewer American goods.
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