Federal Reserve

The Federal Reserve

Organization

There are many parts to the Federal Reserve, all in which serve a different purpose. The first is the Board of Govenors, consiting of 7 governors who are all the leaders of the Federal Reserve. The next ccomponent is the Federal Reserve Banks, there are 12 banks and 24 branches that makeup this department. There are also member banks. This banks are stock holders of the Reserve bank in thier district. In addition to that, there are approximately 17,000 other depository institues in addition to the member banks. They provide people with checkable desposits and other banking services. The FOMC stands for the Federal Open Market Comittee, this comittee is the monetary policymaking body. Basically, this comittee manges the nation's money supply. The last component of the Federal Reserve is the advisory council. There are three advisory councils, The Federal Advisory Council, The Consumer Advisory Council, and The Thrift Institutions Advisory Council. These meetings occur two to four times a year, and take interest in current matters.

The Federal Reserve was created on December 23,1913. This occured after President Woodrow Wilson signed the Federal Reserve Act. It was first established to serve as the U.S Central bank.

History

There are four main responsibilities that the Federal Reserve must obide by: The first is conducting the nation's monetary policy by influencing money and credit condiitons, the second is maintaining the stability of the financial system, also to protect the credit rights of the consumers. Third, they must supervise and regulate the banks and other financial instituions. Lastly, they must provide certain financial services to the US Government, US Financial Institutions, and foreign official institutions.

Monetary policy consists of the actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. Monetary policy is maintained through actions such as modifying the interest rate, buying or selling government bonds, and changing the amount of money banks are required to keep in the vault (bank reserves).Investopedia http://www.investopedia.com/terms/m/monetarypolicy.asp#ixzz4N7KToijn