The Central Bank or The Fed

This role is achieved through the implantation of the monetary policies. According to Arnold (2008), Fed has several tools at it disposal that it uses in the monetary polices. These are; the open market operations which involve buying and selling U.S government securities in the financial markets. Further the bank is charged with the responsibility of determining the required reserve ratio. This ratio is given to the commercial banks dictating the minimum amounts that they should hold in to their accounts as deposits and for lending. Finally the Fed sets the discount rates putting in to consideration the overall market rates s well as desired effect on borrowing that the Fed seeks to achieve. In addition to these three major roles, as a bank, the Federal Reserve Bank can play the roles played by the commercial banks as the rules are not entirely prohibitive as far as this duty is concerned.

There are many thoughts about the Federal Reserve, some people think it is the biggest thief ever and some other people think that the Illuminati is running the show. Also some people know that the Federal Reserve has saved the economy of the United States a couple of times from depressions. Moreover, economists think that the Federal Reserve saved the U.S. from the most recent depression in 2008. Many people in the U.S. may not know who Alexander Hamilton is; however, any economist or anybody who is studying economy should know who he was. Alexander Hamilton played a big role in the economy of the United States in 1791, when he started promoting a movement to embrace a central bank. In that same year the first bank of the United States

Many countries has their own central bank, such as England established their central bank in 1694, japan established bank of Japan in 1882. The function of central bank is supervising and regulating the bank system. And central bank is also controlling the money supply for their nation. It can issue banknotes, serve as a bank for financial institutions and government, maintain the value of the currency, supervise banking institutions, establish and conduct monetary policy. United Stated established the Federal Reserve till 1913. It was a big step for the nation. That’s means, all national bank were become members of the Fed. And the story of Fed has been started in that year. It play an important roles in several times financial crisis. As one of the branches of Dallas districts, Houston Federal Reserve has their own responsibility for helping the economic. The challenge of Houston branch is coordinate the different ideas between regional and national. And the different target and benefit conflict between the government and private banking. Houston branch need report their information that

The Federal Reserve System has three branches: the Board of Governors, The Federal Open Market Committee, and Reserve Banks. The Federal Reserve System (Fed) supplies and regulates America’s money to all the banks. The Board of Governors is the main authority of the three branches of the Fed, and it supervises other banks. The Federal Open Market Committee is the most prominent policymaker of the three branches and regulates the supply of money in the economy. Federal Reserve Banks serve other banks, this is why they are called banker’s banks. There are twelve Federal Reserve Banks which represent different states and these “districts” share data for monetary policies. The future role of monetary policy is vital

The Federal Reserve system is some time referred to as Federal Reserve is better known as (The Feds) is an independent institution that was created on December 23, 1913 when President Woodrow Wilson signed the Federal Reserve Act into Law, and has been the central bank of the United States ever since. Central bank the main purpose of the United States that regulate all the supplies of money and credit to the economy. The Fed have two things in mind when theses regulates come to mind that’s to prevent the economy from rapidly growing too fast, and also to prevent the economy from shrinking. “The Federal Reserve system was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system”.

The Federal Reserve System was founded by Congress in 1913 to be the central bank of the United States. The Federal Reserve System was founded to be a safer, more flexible, and more stable monetary financial system. Over the years, the role of the Federal Reserve Board and its influence on banking and the economy has increased. Today, the Federal Reserve System's duties fall into four general categories. Firstly, the FED conducts the nation's monetary policy. The FED controls the monetary policy by influencing credit conditions in the economy. The FED measures its success in accomplishing these goals by judging whether or not the economy is at full employment and whether or not prices are stable. Not only

The Federal Reserve, Bureau of Labor Statistics, Department of Labor, Department of Commerce and Treasury Department play crucial roles in the value and availability of money in the USA economy. First, the Federal Reserve is the central bank of the United States. It is run by a Board of Governors appointed by the president and serves as a bank to banks. It performs five general functions to promote the effective operation of the U.S. economy. One, it conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. Second, it promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the

The Federal Reserve System, initially created to subdue banking panics, has now adopted numerous responsibilities like encouraging a sound banking system and a healthy economy. To delegate these responsibilities, the FED has been divided up into a power diffusing

Prior to the institution of the Federal Reserve Act, the U.S. financial system’s basic structure was determined by the National Banking Acts of 1863, 1864, and 1865 (Broz, 1999). The purpose of the legislation was to provide a uniform national currency and to raise revenue for the federal government during wartime (Broz, 1999). While effective in its main purposes, it was flawed in the fact that the increase of available currency had little to no effect on consumer demand which led to large seasonal swings in interest rates and banking panics (Friedman & Schwartz, 168-169). In an attempt to rectify the shortcomings of the National Banking System, government turned to the New York Clearinghouse Association, purportedly known as the first central bank. Originally responsible for the settlement of payments between financial institutions, it was chosen because it was the only source at the time that had the ability to provide funds during high demand periods through a discount window or an open market operation (Broz, 1999). In the end, it failed to maintain an adequate amount of liquid reserves to counteract the monetary crisis‘s that ensued during the agricultural harvest cycles, when currency demands accelerated.

The Federal Reserve System is a central banking of the US Government, most commonly known as the Fed. A central bank serves as the banker to both the banking community and the government. It issues the national currency, conducts monetary policy, and plays a major role in

The central bank’s liabilities are also seen in three different forms which are: currency, government deposit accounts, and deposit accounts of the commercial bank. These can also be divided into different groups based on their purpose. The currency and government deposit accounts allow the central bank to perform its role as the government’s bank. Currency is used in daily transaction everywhere, and since it circulates in the hands of the nonbanking public, it is the principal liability of most central banks. Government accounts are used as a place to deposit the income and used to pay for the things they buy, it is nearly similar to what people need a deposit account for. The central bank provides the government an account to deposit their funds, and they can shift their funds between accounts at commercial banks and the Federal Reserve. Lastly, is the commercial accounts and contains two parts: one is the deposits at the central bank and the cash in the bank’s own vault. The bank can withdrawal funds from the central bank, and the commercial bank can wire portions of a deposit accounts

What is the relationship between central bank (CB) roles and banking crisis of a country? The CB can utilize its monetary instruments to bail out the insolvent banks and therefore keep the banking system still functioning (Khan, Khan and Dewan, 2013). However, the efficiency of utilizing this monetary instrument depends on the governance of the CB. The governance of CB consists of three essential elements, independency, accountability and transparency (Amtenbrink, 2004; Dincer and Eichengreen, 2014). The CB role on influencing the impact of crisis may not happen if there is a political influence from the government, such as the legislative and the executive. The legislative and executive bodies can intervene the

A central bank may be defined as a national bank that provides financial and banking services for the country’s government. A central bank is different to a commercial bank such as Barclays or RBS whose main objective is profit maximisation. There are many central banks across the world, each one providing services for their own country. For example, the Bank of England is the central bank of England which was established in 1694, the Federal Reserve is the central bank of the USA and that was established in 1914. Although they all differ in terms of which government they provide a service for, their roles as central banks remain quite similar. The two primary goals of most if not all central banks are to achieve monetary stability and

A financial crisis always raised an essential question about the role of the central banks (CBs) in promoting banking stability. One of the important lessons of the crisis is that central banks will unavoidably be involved during the occurrence of a banking crisis since the CBs should be able to provide large amounts of fund to recover the banking system from the crisis.

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A, Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the other banks. They provide specialised functions i.e. issue of paper currency, working as bankers of government, supervising and controlling foreign exchange. A central bank is a non-profit making institution. It does not deal with the public but it deals with other banks. The principal responsibility of Central Bank is thorough control on currency of a country.