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The Federal Reserve System youtube/watch?v=GsxmwjQWiZs

The Federal Reserve System http://www.youtube.com/watch?v=GsxmwjQWiZs. List the 3 parts of the Federal Reserve System. Board of Governors Federal Open Market Committee (FOMC) Reserve Banks. Why was the Federal Reserve System Created? . Address Banking Panics.

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The Federal Reserve System youtube/watch?v=GsxmwjQWiZs

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  1. The Federal Reserve Systemhttp://www.youtube.com/watch?v=GsxmwjQWiZs

  2. List the 3 parts of the Federal Reserve System • Board of Governors • Federal Open Market Committee (FOMC) • Reserve Banks

  3. Why was the Federal Reserve System Created? • Address Banking Panics

  4. When was the Federal Reserve System Created? • 1913

  5. The Board of Governors

  6. How many people are on the Board Of Governors? • 7 – Ben Bernanke - Chairman

  7. How do the members of the Board of Governors get their jobs? • Appointed by the President and confirmed by the senate

  8. For how long do the members of the Board Of Governors serve? • 14 years

  9. What is the role of the Board Of Governors? • Help write policy to make banks sound • Oversee Federal Reserve Banks • Decisions about money growth

  10. The Federal Open Market Committee(FOMC)

  11. What is the primary purpose of the Federal Open Market Committee (FOMC)? • Direct monetary policy

  12. Who is on the FOMC? • 7 members of the Board of Governors • President of the Reserve Bank of NY • 4 Reserve Bank Presidents (rotating through)

  13. What is the Federal Funds Rate? • Bank rates of interest that banks charge each other for loans.

  14. Federal Reserve Banks

  15. How many districts are in the Federal Reserve System? • 12

  16. What are the three audiences of the Reserve Banks? • Bankers • US Treasury • Public

  17. What is the purpose of the Federal Reserve Banks? • Coins • Store Currency • Supervise Banks • Bankers Bank

  18. The Fed’s Regional Structure

  19. What are the Fed’s three main responsibilities? • Monetary Policy • Financial Services • Supervising Banks

  20. How many Reserve Banks are there? • 12

  21. How many Branch Banks are there? • 24

  22. The federal Reserve Map!

  23. Conducting Monetary Policy

  24. What does it mean to “conduct monetary policy”? • Managing the nations system of money and credit • Expansionary policy: increasing the supply of money due to fear of recession! • Contractionary policy: decreasing the supply of money due to inflationary fears!

  25. List and explain the 3 tools that the Fed has to carry out its monetary policy. • 1. Discount Rate – interest rate reserve banks charge for short term loans • Expansionary: interest rates lowered • Contractionary: interest rates raised

  26. 2. Reserve Requirements – percent of deposits that must be held at the member banks at all times • Expansionary: reserve requirement lowered • Contractionary: reserve requirement raised

  27. 3. Open Market Operations – buying and selling of bonds • Expansionary policy: US Treasury bonds are bought back from public! • Contractionary: US Treasury bonds are sold to public!

  28. Which of the three tools is the most frequently used tool of the Fed? • Open Market Operations

  29. Supervising and Regulating Banks

  30. What is the difference between regulation and supervision of banks? • Regulation – written rules telling banks what they can and can’t do • Supervision – enforcement of policy (written rules)

  31. List and explain the three duties of the Fed that are associated with supervising banks. • Establish safe and sound banking practices • Protecting consumers • Ensuring the stability of financial markets

  32. Providing Financial Services

  33. What kinds of financial services does the Federal Reserve System provide for banks? • Distributes currency • Process checks • Electronic payments

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