This website uses cookies to ensure you have the best experience. Learn more

Federal Reserve Essay

3863 words - 16 pages

It is true what many say, “money makes the world go round”. Between 1775 through 1791 to finance the war America printed the first paper currency know as “continentals.” Prior to this America relied on the barter system which, made fighting almost impossible. Welcoming the bills and foregoing bartering lead to inflation. The inflation was mild at first however is accelerated rapidly as the war progress. Eventually, people lost faith in the notes and they quickly became worthless. This would lead to three failed attempts to decentralized US Banking in an effort to restore trust and avoid economic disaster, after the failed attempts, The Federal Reserve Act was established in 1913 by ...view middle of the document...

This is done by reducing the money supply when inflation is high and increasing the money supply when rates are too high and there is little or no growth in the economy. The decisions that are made by the Federal Reserve not only effects the economy of the United State but the global economy. We are not alone.

Currently the System consists of a seven member Board of Governors with headquarters in Washington, D.C., and twelve Reserve Banks located in major cities throughout the United States, such as
The Board of Governers are appointed byt the President and are confirmed by the Senate to serve their 14 year term with no option to be reappointed.

The primary responsibility of the Board members is the formulation of monetary policy. The seven Board members constitute a majority of the 12-member Federal Open Market Committee (FOMC), the group that makes the key decisions affecting the cost and availability of money and credit in the economy. The other five members of the FOMC are Reserve Bank presidents, one of whom is the president of the Federal Reserve Bank of New York. The other Bank presidents serve one-year terms on a rotating basis. By statute the FOMC determines its own organization, and by tradition it elects the Chairman of the Board of Governors as its Chairman and the President of the New York Bank as its Vice Chairman.The Board sets reserve requirements and shares the responsibility with the Reserve Banks for discount rate policy. These two functions plus open market operations constitute the monetary policy tools of the Federal Reserve System.In addition to monetary policy responsibilities, the Federal Reserve Board has regulatory and supervisory responsibilities over banks that are members of the System, bank holding companies, international banking facilities in the United States, Edge Act and agreement corporations, foreign activities of member banks, and the U.S. activities of foreign-owned banks. The Board also sets margin requirements, which limit the use of credit for purchasing or carrying securities.In addition, the Board plays a key role in assuring the smooth functioning and continued development of the nation's vast payments system [see Fedwire and Payment System Risk Policy].Another area of Board responsibility is the development and administration of regulations that implement major federal laws governing consumer credit such as the Truth in Lending Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act and the Truth in Savings Act [see Consumer Information and Community Development].Meetings
The Board usually meets several times a week. Meetings are conducted in compliance with the Government in the Sunshine Act, and many meetings are open to the public. If the Board has convened to consider confidential financial information, however, the sessions are closed to public observation.Contacts within Government
As they carry out their duties, members of the Board routinely...

Other Papers Like Federal Reserve

Eco212 Federal Reserve Paper

361 words - 2 pages Federal Reserve Paper Money to the global market and governments around the world consider it to be an object that has value. There is a common understanding that money is used to exchange or trade services and goods throughout the world. In the early 1900’s the Central banking system and Federal Reserve were founded by the United States Congress resulting from the aftermath of an economic crisis that shook the United States

Federal Reserve Paper

875 words - 4 pages Federal Reserve paper Julio L. Aguilera ECO/372 October 17, 2012 Charles Meyers Federal Reserve paper The author of this paper will be providing you the reader with information on the United States Federal Reserve so that you have a better understanding of it and how they operate. With the information provided from the author’s research hopefully you the official will make the decision of doing business with United States Federal

Federal Reserve System

2008 words - 9 pages The Organization of the Federal Reserve System [pic] 1. The Board of Governors of the Federal Reserve System Appointments to the Board. There are seven members in the Board of Governors. They are appointed by the President and confirmed by the Senate to serve 14-year terms of office. The President designates, and the Senate confirms, two members of the Board to be Chairman and Vice Chairman, for four-year terms. Representation

The Federal Reserve System

589 words - 3 pages The Federal Reserve System The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.  The Federal Reserve or the Fed, as some call it, has three primary functions: monetary policy, banking supervision, and financial services. For example

The Federal Reserve

1130 words - 5 pages The Federal Reserve University of Phoenix ECO/212     Money was made with the purpose to assist in the exchange of services and goods with the different values between consumers and businesses around the globe. Money is controlled and created by the central bank in the nation; the central bank being the Federal Reserve. The Federal Reserve, or often referred to as the FED, determines the value of the dollar and is constantly

Federal Reserve Bank

533 words - 3 pages Federal Reserve Bank Lovey Brown ECO/372 August 9, 2012 The United States, was economically influenced by both domestic and global events in 2011. The Japanese earthquake left a major fiscal effect on the world. Monetary situations of importance is the reason states have central banks. These banks act as the state's money directors. Purpose and Function of Money Money has a main purpose and function in the

The Federal Reserve

983 words - 4 pages The Federal Reserve Katherine Streit ECO/212 June 19, 2011 Ashlie Warnick The Federal Reserve In 1913, Congress passed the Federal Reserve Act, setting up the Federal Reserve System, commonly known as “the Fed” (Hubbard & O’Brien, 2010). The Federal Reserve sets the nation’s monetary policy, which in turn affects the nation’s productivity and employment levels. Money’s Function and Purpose Money is defined as assets that people

The Federal Reserve System

837 words - 4 pages Federal Reserve Paper University of Phoenix Under the Federal Reserve act of 1913, the central bank of America was formed and eventually became to be known as the Federal Reserve. The Federal Reserve was created to help bank runs, and limit any financial panic that citizens would have concerning the economy. Over time the functions of the federal reserve has changed and grown, but the important role that it pays with America’s well being

Federal Reserve Paper

796 words - 4 pages Federal Reserve Paper Federal Reserve Paper The function and purpose of money is very simple; Money is meant to assist trade making life better. The purpose of money, whether it is credit cards, demand deposits or currency, it’s a means of exchange to buy services and goods. It is a known fact that all humans’ beings will accept it and also a tool taken in exchange for something else. Money has three functions in the economy. They

Federal Reserve Indepence

1742 words - 7 pages 1. What gives the Fed its independence? The Federal Reserve System is an independent entity within the government. It operates autonomously within a framework of economic and financial policy objectives established by the government. Although its decisions are not ratified by the executive branch, it is subject to congressional oversight. For instance, its Chairman periodically reports to Congress. Its structure was designed by Congress to

The Federal Reserve

1071 words - 5 pages The Federal Reserve University of Phoenix The Federal Reserve The Federal Reserve System is the central bank of the United States. The purpose of the Fed is to control the United States economy by implementing policies to regulate interest rates and the money supply. To understand better how the Fed system works, we have to understand the purpose of money and its function, and explained how the central bank manages the monetary system

Related Essays

Federal Reserve Essay

781 words - 4 pages Federal Reserve Paper This paper will contain in particularize the purpose and function of money, how the central bank manages the monetary policy, the direction of the current monetary policy, what action the Federal Reserve has taken to head in the certain direction, and the effects of monetary policies on the economy’s production and employment. Money is a commodity that is utilized around the world. It is used to purchase

Federal Reserve Essay

842 words - 4 pages The Federal Reserve Gabe Gambrell ECO/212 December, 18, 2010 The Federal Reserve The object of money is used as a form of payment around the globe. The major functions of money are store of value, unit of account, and medium of exchange. Money is an economic resource that enables one to obtain value and use as a function of exchange for a need or desire in the form of goods and services. Unit of account is the

Federal Reserve Essay

713 words - 3 pages Federal Reserve Arlisha James ECO/372 October 16, 2012 Jonathan Edelman Federal Reserve The purpose and function of money in today’s world market are still assets in which citizen’s exchange for goods and services received or for paying one’s creditors. Revenue (cash) is utilize in implemented to do four operations, which is store accounts, medium exchange, unit of account, and standard of deferred payments. The banking system that

Federal Reserve Essay 691 Words

691 words - 3 pages Federal Reserve The FOMC (Federal Open Market Committee) is the monetary policy making body of the Federal Reserve System. The committee consists of twelve members; that are the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve a one year term on a rotating basis. The committee is responsible to