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The Federal Reserve

The Federal Reserve. Structure and Functions. Structure. Board of Governors Federal Reserve Banks Federal Open Market Committee Member Banks Other Depository Institutions. Board Of Govenors. 7 members Appointed by the president confirmed by the senate Chairman- Ben Bernanke

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The Federal Reserve

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  1. The Federal Reserve Structure and Functions

  2. Structure Board of Governors Federal Reserve Banks Federal Open Market Committee Member Banks Other Depository Institutions

  3. Board Of Govenors • 7 members • Appointed by the president confirmed by the senate • Chairman- Ben Bernanke • Carries out bank regulatory laws • Oversees the activities of Reserve Banks • Supervises financial services industry • Report to congress on Monetary Policy

  4. Federal Open Market Committee • 7 Governors, Pres. of NY Reserve Bank and 4 other Reserve Bank Presidents • Conducts Monetary Policy • Promote stable prices and economic growth • Manages the Nation’s Money Supply!

  5. Federal Reserve Banks • 12 banks and 25 branches • Each bank serves one of 12 regions • Called “banker’s bank” • Store Currency • Process checks and electronic payments • Conduct Local Financial Research • Manage financial activities for the U.S. Government

  6. Federal Reserve Bank Regions • New York • Boston • Philadelphia • Richmond • Atlanta • Chicago • St. Louis • Minneapolis • Kansas City • Dallas • San Francisco • Cleveland

  7. Member Banks and Other Depository Instatutions • 38% of all commercial banks are members. Aprox- 3,000 banks • National banks must be members • Member banks own shares of Reserve Banks • 17,000 other depository institutions are subject to banking regulations • All financial institutions can use the services of the Reserve Banks

  8. Monetary Policy Used to promote economic growth and keep the banking system safe and sound Decisions made by FMOC are carried out by New York Fed Set the Discount rate (Interest Rate) Buy and sell Treasury Securities

  9. Supervising Banks Establish safe and sound banking practices Protecting financial transactions Act as a lender of last resort to banks

  10. Financial Services Try to make payment services more efficient The bank for banks Make loans to banks for the short and long term The authority to print currency

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