The Federal Reserve Board - Essay Example

Free

Extract of sample
The Federal Reserve Board

The Federal Reserve Board, commonly called the Fed, is the federal banking system, its governors, and its regulatory mechanisms. It has a board of governors known as the Federal Reserve Board, regional banks, and smaller banks that own shares in the federal system.The Fed is responsible for regulating the economy through the control of the money supply. They are also charged with the oversight of the banking industry to insure compliance by the participants. They also act as the servicer for several other banking institutions.One of the primary functions of the Fed is to stabilize the economy. There is some debate about when the Fed should act as a stabilizing force and when it should act as an energizer or cooling factor. However, generally the Fed tries to maintain a stable growth rate, low inflation, and optimize the unemployment rate.Controlling the money supply and the interest rate regulates these factors. By lowering the interest rate, money is easier to borrow and the economy picks up steam. However, this may also create inflation. By raising interest rates, the money supply contracts and inflation falls. At a recent meeting, the Fed left the interest rate alone saying they were more concerned about inflation than a weak economy (Fed Leaves). However, with falling inflation there is a risk of rising unemployment. The Fed carefully balances these variables to keep the economy on an even keel.The Fed can also increase the money supply by increasing the reserves held by banks that loans are drawn against. ...
Download paper

Summary

The Federal Reserve Board, commonly called the Fed, is the federal banking system, its governors, and its regulatory mechanisms. It has a board of governors known as the Federal Reserve Board, regional banks, and smaller banks that own shares in the federal system…
Author : kulasdanielle
Download 0

Related Essays

Ben Bernanke - Federal Reserve Chairman
Ben found himself being an American since his paternal grandfather immigrated to Ellis Island on January 23, 1891. They shifted from New York to Dillon in the 1940s (Snowdown, 2002). This paper will seek to discuss Ben Bernanke’s history, education, background, and policy at the Federal Reserve. When Ben was a young adult or teenager, he worked construction and as a waiter at a nearby restaurant within the surroundings of his hometown of Dillon prior joining college. In order to afford upkeep for himself while he was at school, he worked during summers along the South of the Border. Ben was...
5 pages (1255 words) Assignment
The Federal Reserve
Therefore, in pursuing these functions Fed aim to stabilize prices and attain maximum employment. The Federal Reserve tightened it policy after the country suffered from a 2008-2010 financial crisis. Moreover, the bank increased regulations in the financial sector to check on bank lending behavior that caused the housing bubble to burst. These measures have achieved tremendously as indicated in the recent Beige Book. The economy at a national level is growing, and this shows that the country is on the path out of the financial crisis. The Board says that consumer confidence has increased, and...
8 pages (2008 words) Essay
Federal Reserve and the Open Market
government, and foreign official institutions, including playing a major role in operating the nation's payments system (Federal Reserve, 2006)....
4 pages (1004 words) Essay
Monetary Policy
The Federal Open Market Committee (FOMC) is group within the Fed that meets several times a year to adjust the interest rates. Lower interest rates will increase demand for products and can stimulate the economy. For example, a decrease in interest rates lowers the cost of borrowing which leads to an increase in investment spending. It also leads families to buy automobiles, houses, and durable goods (Federal Reserve Board)....
2 pages (502 words) Essay
Federal Reserve: iInflation
It also acts as the bank's bank, meaning that the Fed is the lender of last resort to banks that need to borrow money to maintain stability. Fed's second and most important task is to control money supply. A special committee at the Fed Reserve - the Federal Open Market Committee - directs the US monetary policy....
5 pages (1255 words) Essay
The Federal Reserve System
The Federal Open Market Committee (FOMC) consists of the Board of Governors and Federal Reserve Bank Presidents. The FOMC is the monetary policymaking body that creates policy designed to stimulate economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments. It makes responsible decisions concerning the open market operations. In addition, the FOMC directs system operations in foreign currencies....
3 pages (753 words) Essay
Federal Reserve
It consists of five presidents of Reserve bank and seven board members of governors.Futher; the current federal rate is 0.25% (Tucker, 2011) Expansionary policies may be appropriate given the current state of the US economy. The reason for applying expansionary policy is to promote the levels of economic activities as well as reduces the deflation. However, care should be taken to prevent further inflation (Brux,
1 pages (251 words) Assignment
Got a tricky question? Receive an answer from students like you! Try us!