Federal Reserve - Essay Example

Only on StudentShare

Extract of sample
Federal Reserve

The Board of Governors is appointed by the President who controls the functions of the Federal Reserve System. There are Federal Reserve Banks which operates in major cities of US. The major objectives of the Federal Reserve System are aimed at the welfare of the US economy. The Federal Reserve System in US is responsible for maximizing the employment opportunities in US, stabilizing the prices in US economy and achieving stability in long term interest rates (Wells 58). The monetary policy is designed by the Federal Reserve System of US. The other functions of the central banking system in US include regulation of the banking structure that includes the government and the private players as well as the advisory councils. The central bank also provides financial services to other depository agencies. The overall financial stability of the economy of US is the responsibility of the Federal Reserve System. Before the Federal Reserve System was set up in 1913, there were around 30000 currencies in the economy of US. Many business houses and even the drug dealers could issue currency notes for financial transactions. This created a situation of instability in the economy of US. ...
Download paper

Summary

Need of Federal Reserve for the US: Justification The Federal Reserve System is the central banking structure of US. The Federal Reserve was established in 1913 with the need of a central financial system in the economy of US. The central banking system was set up under a situation of continuous financial panics in the economy of US…
Author : clara56

Related Essays

The Role of Direct and Indirect Taxes in the Federal Reserve
i. Present in the UK for a minimum of 183 days ii. Not habitually in the UK but makes substantial visits averaging a minimum of 91 days a year in each of four or more consecutive years. For anyone who may be emigrating from the UK, the number of years is three instead of four. However, if there are extenuating circumstances such as illnesses the days are ignored for the 91 day rule but not for the 183 day rule. Ordinary residence indicates a higher degree of permanence when compared to residence. An individual is considered to be ordinarily resident if residence in the UK is of a habitual...
10 pages (2510 words) Essay
The Monetary Behavior as Created by the Federal Reserve
The Federal Reserve has the power, and has always had the power since its creation, to control the amount of funds in its regional banks throughout the United States. By the Federal Reserve requiring any Federal Reserve banks to keep reserves on hand to handle unexpected outflows as well as meet the demands for the daily operations, it was believed that stability in the behavior and value of a dollar would result (Federal Reserve Bank of San Francisco). These reserves, however, also play an important part in how the Federal Reserve controls the behavior of a US dollar throughout the nation and...
8 pages (2008 words) Essay
the federal reserve
Close co-ordination between the Federal Reserve and the Government of the USA is essential, because monetary policies should be in sync with fiscal policies for an effective and sustainable economic growth in the long run. Role of Federal Reserve in stabilizing economy The steps taken by the Federal Reserve, for example by increasing the interest rates to reduce inflation will have an impact on industrial production, consequently on employment. Therefore regulating interest rates in an economy by the Federal Reserve is a balancing act which takes into account several factors after analyzing...
4 pages (1004 words) Essay
The Federal Reserve
This paper seeks to analyze the role of the financial markets in economic wealth creation in the United States as well as three financial securities which include; stock shares, bonds, and treasury bills. Analyze the role financial markets play in creating economic wealth in the U.S. Financial markets have a significant role as far as the United States economy is concerned. Most importantly they aid in the creation of wealth through various ways. In line with this a major role of financial markets is the facilitation of transfer of funds from those who have surplus to those without. This...
5 pages (1255 words) Essay
Comparison Between European Central Bank and Federal Reserve Bank
Ideally, they enjoy the monopoly of controlling money supply and can use the money printing policy to manage the financial situation in their currency zones. Monetary Policy Objectives Comparing the two, FED can be described as having multiple objectives, while the ECB has a single mandate. By the Federal Reserve Act, FED is set to handle several compatible goals; price stability is given more emphasis, but employment and low inflation are also given an implicit rank among other economically concerned objectives. The article clause requires that in the process of sustaining a long-run...
3 pages (753 words) Research Paper
The Federal Reserve Bank
It was established in the year 1791 with its charter signed by George Washington. The bank used to perform all the major banking functions. After the expiry of the charter 20 years hence, country was without a central bank for few years resulting into inflation. Again a second bank came into existence in 1816 with a charter signed by James Madison. In 1833 again the charter expired and United States went without a central bank for 40 years. In 1873, gold was standardized into bimetallic standard. Then a private set up by the name of JPMorgan came into existence who was the lender of the last...
5 pages (1255 words) Essay
The Federal Reserve was effective/successful in its management of the"Great Recession"
However, a near reoccurrence of the same situation took place in the year 2008 when worldwide; all nations had difficult economic situations (Berton 254). At about the Great Depression period, the rate of the Real Gross Domestic Product began to decline at a rate of about 6% annually, and the monthly average number of jobs lost rose to about 750,000. This stunning turn of events led to the stunning application of stringent fiscal and monetary policies by the Federal Reserve so as to curtail the spread of the effects. In responding to the unusually large size of the fiscal stimulus, the Federal...
10 pages (2510 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!