The Federal Reserve Guiding Question What is the

The Federal Reserve

Guiding Question What is the Federal Reserve system?

The Fed Today Watch the video The Fed Today Answer the questions as you watch We’ll discuss them after the video

Video Questions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. What is the mission of the Federal Reserve? How has that mission expanded? How is the Fed structured? What is the primary focus of the Fed’s monetary policy? How happens when the supply of money increases? What happens when the supply of money decreases? What is the primary way that the Fed stabilizes the nation’s supply of money and credit? What does the Federal Open Market Committee do if they determine that there is too much money in circulation and why? What does the Fed do if they determine that there is too little money in circulation? How does the Fed do in its supervisory role over banks? Why is the Fed referred to as the “banker’s bank? ” What does the Fed to be sure that there’s always enough money in circulation? What happens when you write a check on your bank account? What are three primary responsibilities of the Fed?

What is the Fed? Central bank of the United States Established in 1913 Purpose is to ensure a stable economy for the nation

Roles & Responsibilities Conduct the nation’s monetary policy Supervise and regulate banking institutions Operate a nationwide payments system

Federal Reserve System Structure Board of Governors 12 Reserve Banks Federal Open Market Committee

Board of Governors Seven members o Appointed by the president o Confirmed by the Senate o Serve staggered 14 -year terms Work includes: o Analyzing economic developments o Supervising and regulating the operations of Federal Reserve Banks o Exercising responsibility in the nation’s payments system

Board of Governors (cont’d) Work includes (cont’d): o Administering consumer credit protection laws o Authorizing changes in banks’ reserve requirements o Supervising Fed member banks and other financial entities o Authorizing changes in the Fed’s discount rate

Federal Reserve Banks Operate a nationwide payments system Distribute the nation’s currency and coin Supervise and regulate member banks and bank holding companies Serve as banker for the U. S. Treasury Contribute to monetary policymaking through Bank presidents’ participation in the FOMC

Supervision & Regulation Promote safety and soundness of banking system along with other regulatory bodies o FDIC, state banking regulators Ensure compliance with laws and regulations Oversee international banking interests

Financial Services Clear more than one-third of nation’s checks Transfer funds electronically

Research Gather, analyze and disseminate economic data Analyze regional and national markets and economic data Design and test econometric models used to produce hard data that factor into policymaking decisions