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Finance & Accounting
Pages 5 (1255 words)
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.
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. ...
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