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 Federal Reserve of the United States

The Federal Reserve is the key bank of the United States. It performs several vital functions to make the US economy efficient. It is bank’s responsibility: Implement monetary policy, promote employment, ensure the stability of the financial system, promote long-term interest rates, limit and reduce systemic risks, and monitor the United States and beyond.

The backup system promotes payment security and efficiency, protecting consumers. Investigates consumer issues, the development of economic activities of the society, and regulates consumer laws.

Each county in the United States has a separate reserve bank. As the country’s economy became more complex, monetary policy production increased cooperation thanks to technological, financial, and other advances. This process took place in 1933-1935, which led to the subsequent formation of the Federal Committee (FOMC).

Following the Monetary Control Act of 1980, reserve banks became even more efficient in system services. The drafters of the Federal Reserve provided the central banking system with three essential features: the operating structure of 12 reserve banks, the main governing board, and a combination of private/public features. The purpose of the Federal Reserve System was to serve the public interest.

The federal system has three central units. These include Reserve Banks, the Board of Governors, and the Open Market Committee (FOMC). The Board of Governors is responsible to Congress for overseeing the system and overseeing the 12 reserve banks.

Some responsibilities are shared among the Board of Governors in Washington. The President appoints board members on the advice of the Senate and with the consent of the Federal Reserve Banks. The Federal Reserve has a close relationship with Congress and the government members, although they make their decisions independently.

Structure

Decisions in the best interests of the US economy are made by the Reserve Banks, the Federal Board of Governors, and the Open Market Committee.

Two other groups also play an essential role in the work of the Federal Reserve. The Federal System Advisory Committees recommend the Governing Board and Depository institutions, including credit unions, banks, and farms.

Depository institutions

Depository institutions provide transactions and account checks. Based on the balances they checked, they must meet the reserve requirements, mainly to have a certain amount in the reserve bank.

Depository institutions that have high balances can lead to institutions that need it to meet these reserve requirements. These rates apply to asset prices, interest rates, and exchange rates. The FOMC sets targets for federal funds and issues authorizations.

Advisory Councils

There are four public policy advisory boards:

Federal Advisory Board – Under FAC law, the board usually meets four times a year. Reserve banks elect one person each year. Each of them represents its district in the FAC. Board members elect their officers.

The Board of Governors initially set up the CDIAC to obtain information from credit unions. CDIAC provides the Board of Governors with knowledge of credit terms and economics.

Model Approval Board – Established in 2012 by the Board of Governors. The board aims to improve the quality of stress tests and increase confidence in the stress testing program.

The Reserve Board established the Community Advisory Board in 2015 to present different perspectives on the economic situation and needs. The CAC meets with members of the Board of Directors annually. The board is served by 15 members who are elected by public nomination.

Federal Reserve Banks have their advisory committees. The most important of these are the Committees on Agriculture, Small Business, and Labor. The Federal Reserve Board hears annual committee reviews and views.

Responsibilities

The Federal Reserve contributes to the efficiency of the US economy and is responsible for taking into account the public interest. Its duties are: The Federal Reserve performs five critical functions in the public interest, including contributing to the stability of the financial system and the prosperity of the US economy. The reserve ensures the creation of stable prices, the US monetary policy. The Federal Reserve monitors risks and participates in the health of the system for the US population.

The Federal Reserve System contributes to the safety and health of financial institutions. He works to popularize US dollar trades. The Federal Reserve provides research to improve financial services.

Members

The Federal Reserve has seven members nominated by the President, their approval by the Senate. The full term is fourteen years. A member who completes a full time is no longer reappointed. However, in the event of an indefinite portion of the word, a member may be reappointed. The Chairman of the Board and the Vice-Chairman are appointed for a term of 4 years.

The Federal Reserve is the main economic link in the US. As part of its responsibility, the Federal Reserve implements the necessary measures to ensure the US economy. The council participates in resolving and resolving the most critical financial issues of the country. 

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