7a federal reserve system


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7a federal reserve system

  1. 1. 7A THE FEDERALRESERVE SYSTEMEPF7 demonstrate knowledge of how monetaryand fiscal policy influence employment, outputand prices
  2. 2. The Federal Reserve System The Federal Reserve System, often called the Fed, is the central banking system of the United States. The goal of the Federal Reserve System is to help the economy achieve stable prices, full employment, and economic growth. The structure of the Federal Reserve System helps to ensure that regional information is represented in national policy decisions and that the Fed remains accountable to the people.
  3. 3. What is the goal of theFederal Reserve System?
  4. 4. Goal of the Federal ReserveSystem The goal of the Federal Reserve System is to help the economy achieve stable prices, full employment, and economic growth. The Federal Reserve System’s responsibilities include:  conducting monetary policy;  supervising and regulating financial institutions;  providing services to depository institutions, the federal government, and the public.
  5. 5. How is the Federal ReserveSystem structured?
  6. 6. Structure of the FederalReserve Twelve regional Federal Reserve Banks and their branch offices carry out the day-to-day responsibilities of the Federal Reserve System. The Board of Governors of the Federal Reserve System, whose members are appointed by the President of the United States and confirmed by the U.S. Senate, provides leadership for the Federal Reserve System. The Federal Open Market Committee (FOMC) is responsible for making monetary policy decisions. The FOMC is composed of members of the Board of Governors and presidents of the twelve Federal Reserve Banks.
  7. 7. How does the Federal ReserveSystem achieve its goal?
  8. 8. Federal Reserve AchievesGoals Monetary policy can lead to changes in the supply of money and the availability of credit. Changes in the money supply can influence overall levels of spending, employment, and prices in the economy.
  9. 9. What are the tools the Federalreserve System uses toinfluence overall levels ofspending, employment andprices in the economy?
  10. 10. Federal Reserve System Tools The major monetary policy tool of the Federal Reserve System is open market operations (purchases and sales of government securities). Other policy tools include increasing or decreasing the discount rate charged on loans it makes to banks (and other depository institutions) and raising or lowering reserve requirements for those same financial institutions.
  11. 11. What is the purpose of thesupervisory and regulatoryfunctions of the Federal ReserveSystem?
  12. 12. Fed’s Supervisory & RegulatoryFunctions The Federal Reserve System supervises and regulates banks : to promote the safety and soundness of the banking system to foster stability in financial markets to ensure compliance with applicable laws and regulations.
  13. 13. What are some of the servicesof the Federal ReserveSystem?
  14. 14. Federal Reserve SystemServicesThe Federal Reserve System provides other services including :  supplying paper money and coin to banks  processing checks and electronic payments  protecting consumers through regulation and education