The document is a report on the Federal Reserve System created by a group of students. It includes sections on the history of central banking in the United States, the structure of the Federal Reserve System, and the roles and responsibilities of its components. It discusses the Board of Governors, the 12 Federal Reserve Banks, the Federal Open Market Committee, and provides details on monetary policy tools like open market operations, the discount rate, and reserve requirements. Individual students contributed sections on the structure of the Federal Reserve, its duties and responsibilities, the FOMC, and how monetary policy is conducted.

1. The Federal Reserve SystemGroup C William Raymond Ailyn Smith Alexandria Salinas Brandon Lopez David Mitchell Our teacher HiranGunasekara Thurs class 12:30-1:50 Oct 1, 2009 Members include

2. Overview : Index Members Role History and understanding Structure of the federal Reserve What are the duties and responsibilities What is the Federal Open Market Committee Fed conducts monetary policy William Raymond &Ailyn Smith-structure Brandon Lopez – duties and responsibilities David Mitchell- FOMC Alexandria Salinas- Monetary policy

3. First Bank of the United States

4. Centralized Banking

5. The Federal Reserve understanding

6. FEDERAL RESERVE STRUCTURE By William Raymond and Ailyn Smith Set up in 1913 after the Federal Reserve Act of 1913 Currently there are 5 board of governors that oversee everything that happens in the fed. And serve a 14 year term 2009 Members of the FOMC Members Ben S. Bernanke, Board of Governors, Chairman William C. Dudley, New York, Vice Chairman Elizabeth A. Duke, Board of Governors Charles L. Evans, Chicago Donald L. Kohn, Board of Governors Jeffrey M. Lacker, Richmond Dennis P. Lockhart, Atlanta Daniel K. Tarullo, Board of Governors Kevin M. Warsh, Board of Governors Janet L. Yellen, San Francisco

7. FEDERAL RESERVE STRUCTURE 2 Provided by CRS report for congress Board of governors was established as a federal government agency Is located in Washington, D.C. -Primary responsibility is formulation of monetary policy. -Have a broad range of supervisory and regulatory responsibilities that affect the entire US banking system. FOMCis policy making body for open market operations- -Meets in Washington, D.C., eight times a year. Consist of 12 members Federal Reserve banks- carry out day to day operations of the Federal Reserve system -Provide fiscal agency and depository services to the federal government. -operate under the general supervision of the Board of Governors in Washington - within each geographical district a city was designated as the location of the Reserve banks Member banks- Hold stock in their local Federal Reserve Bank

8. Federal Reserve Banks continued There are 12 Federal reserve banks. Each one has a board of directors work closely with the reserve bank president which provide input on monetary policy The primary responsibility of the central bank is to influence the flow of money and credit in the nation's economy. This is the New York Federal Reserve Bank on 33 liberty street. New York reserve is most dominant of them all. Has over 5,000 metric tons of gold bullion ($160 billion as of March 2008). This is the largest amount of gold in the world on record. However Swiss Banks don’t have to disclose that information.

9. Interest Rates Federal Fund Rate

10. Open Market Committee The Federal Open Market Committee (FOMC). Membership: The FOMC is composed of the seven members of the Board of Governors and five Reserve Bank presidents. Organization: By statute, the FOMC determines its own organization. Each year at its first meeting, the Committee elects its Chairman and Vice Chairman and selects staff officers to serve the Committee for the coming year. Decision-making Process: They debate on financial and economic decisions. Vote on new policies. These will in fact affect the growth of the economy. Effects of Policy: Depository institutions are required to maintain reserves in certain proportions against various types of their checkable deposits. Open market operations as directed by the FOMC are the major tool used to influence the total amount of money and credit available in the economy. ReportsBy law, the Board of Governors must keep a record of the actions taken by the FOMC on all questions of policy and to include in its annual report to Congress the vote on and reasons for each actions.

11. Federal Reserve System Duties and Responsibilities Brandon Lopez

12. What are the Federal Reserve’s duties and responsibilities? There are certain duties and responsibilities that need to be performed to help better the nation. Placed under 4 general ideas, the duties and responsibilities of the Federal Reserve are as followed: Monetary Policy Supervision & Regulation Consumer & Community Affairs Payment System

13. Monetary Policy The Federal Reserve must manage the nation’s monetary policy by helping influence money and credit conditions in the economy that focuses on employment throughout the nation and reasonable prices. Goals Monetary Policy affecting the Economy Limitations Guides Monetary Aggregates Interest Rates The Taylor Rule Foreign Exchange Rates

14. Supervision & Regulation The Federal Reserve must supervise and manage banks to make sure that the nation’s banking and financial system are safe and secure. They must also protect the credit rights of all financial institutions’ clients. Responsibilities Federal Financial Institutions Examination Council Supervisory Process Regulatory Functions

15. Consumer & Community Affairs The Federal Reserve must manage and keep high standards of stability of the financial system and must be ready for systemic risk that may occur in financial markets. Responsibilities Consumer Protection Community Affairs

16. The Federal Reserve in the U.S. Payments System The Federal Reserve must participate in financial services to the U.S. government, to the public, to financial institutions (banks), and to foreign official institutions, as well as helping with operating the nation’s payment systems. Congress Financial services Fiscal Agency Services

17. Monetary policy is made by the FOMC (Federal Open Market Committee) 1. Seven members on the board of governors 2. Five reserve bank presidents 3. Meet eight times a year

18. Open Market Operations 1. Buying and selling previously issued securities 2. Add credit to banking system when they buy securities from dealers 3. Drain credit when they sell securities to dealers 4. This determines the federal funds rate

19. Discount rate policy 1. Make Short Term Loans to Banks to Help with Reserves 2. Raise the rate- slows economy, checks inflation 3. Lower the Rate- stimulates economic growth

20. Reserve Requirements 1. Raise the Amount- Reduce Lending 2. Lower Reserve Amount- Increase Lending 3. Not changed much, last change was in 1992 from 12% to 10%

21. Sources Structure - http://en.wikipedia.org/wiki/First_Bank_of_the_United_States http://www.federalreserve.gov/pubs/frseries/frseri3.htm http://www.federalreserve.gov/ http://en.wikipedia.org/wiki/Federal_Reserve_System https://www.policyarchive.org/bitstream/handle/10207/3436/RS20826_20050615.pdf?sequence=1

22. THANK YOU FOR YOUR TIME AND WE HOPE ON BEHALF OF THE GROUP MEMBERS THAT YOU HAVE A WIDE ARRAY OF NEW KNOWLEDGE THAT YOU CAN TAKE WITH YOU ABOUT THE FEDERAL RESERVE SYSTEM. WE WOULD ALSO LIKE TO THANK OUR TEACHER HIRAN G FOR GIVING US THIS TIME TO BE A PART OF HISTORY AND TO DO A RESEARCH ON SUCH A IMPORTANT TOPIC THAT WILL AFFECT OUR KIDS AND THE FUTURE. THE END