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Federal reserve final-ppt system and structure for econ
Citation preview
The Federal Reserve SystemGroup C
Members include
Our teacherHiran GunasekaraThurs class 12:30-1:50Oct 1, 2009
William Raymond Ailyn Smith Alexandria Salinas Brandon Lopez David Mitchell
Economy
Money
&
Banking 3331-
350
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
First Bank of the United States
Alexander Hamilton•Born Nevis Caribbean•Was the first US Secretary of the Treasury
•Help found First Bank of the United States•Believed it was necessary to create stability from after the independence from Britain
Centralized Banking
The Federal Reserve understanding
Established in 1913It’s a independent entity
It was created by congressHas a check and balances
system
designed to be a compromise between national and
regional powers.Since its founding in 1913, the Federal
Reserve System has evolved to meet the needs of a changing financial system and a growing economy. Its unique
structure, however,remains its most outstanding feature
and its greatest strength.
Set up in 1913 after the Federal Reserve Act of 1913
2009 Members of the FOMCMembers
Ben S. Bernanke, Board of Governors, Chairman
William C. Dudley, New York, Vice Chairman
Elizabeth A. Duke, Board of GovernorsCharles L. Evans, ChicagoDonald L. Kohn, Board of GovernorsJeffrey M. Lacker, RichmondDennis P. Lockhart, AtlantaDaniel K. Tarullo, Board of GovernorsKevin M. Warsh, Board of GovernorsJanet L. Yellen, San Francisco
Currently there are 5 board of governors that oversee everything that happens in the fed. And serve a 14 year term
FEDERAL RESERVE STRUCTURE
By William Raymond and Ailyn Smith
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.
FOMC is 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
FEDERAL RESERVE STRUCTURE 2
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 policyThe primary responsibility of the central bank is to influence the flow of money and credit in the nation's economy.
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.
This is the New York Federal Reserve Bank on 33 liberty street.
Federal Reserve Banks continued
I n te res t Ra tes
Federal Fund Rate
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.
Federal Reserve System
Duties and Responsibilities
Brandon Lopez
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 PolicySupervision & RegulationConsumer & Community AffairsPayment System
Monetary PolicyThe 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.GoalsMonetary Policy affecting the EconomyLimitationsGuides
Monetary Aggregates Interest Rates The Taylor Rule Foreign Exchange Rates
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.ResponsibilitiesFederal Financial Institutions
Examination CouncilSupervisory ProcessRegulatory Functions
Consumer & Community AffairsThe 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.ResponsibilitiesConsumer ProtectionCommunity Affairs
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.CongressFinancial servicesFiscal Agency Services
Monetary policy is made by the FOMC (Federal Open Market Committee)
1. Seven members on the board of governors2. Five reserve bank presidents3. Meet eight times a year
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
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
Reserve Requirements
1. Raise the Amount- Reduce Lending2. Lower Reserve Amount- Increase Lending3. Not changed much, last change was in 1992
from 12% to 10%
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
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