The Pros And Cons Of The Federal Reserve System
“The Federal Reserve System is the central banking system of the United States. It was created in 1913, with the enactment of the Federal Reserve Act. Its duties today are to conduct the nation’s monetary policy, supervise and regulate banking institutions, maintain the stability of the financial system and provide financial services to depository institutions, the U.S. government, and foreign official institutions.”
The constitutionality of the Federal Reserve System (FED) has been a topic of debate for many years.
Since its conception over 100 years ago, people/critics continue to question whether Congress had the authority to delegate such power to a private institution, which controls our money supply, thus impacting our national economy. …show more content…
Currency could be issued by almost anyone…There were many problems that stemmed from this, including that some currencies were worth more than others. Some currencies were backed by silver or gold, and others by government bonds. There were even times when banks didn’t have enough money to honor withdrawals by customers…This is why the Fed was created.”
Main objectives of the FED
The FED is responsible for (or The responsibilities of the FED include:)
i. Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. ii. Supervising and regulating banking institutions iii. Maintain the stability of the financial system and containing systematic risk that may arise in financial markets iv. Providing financial services to depository institutions, the US government, and foreign official institutions, including playing a major role in operating the nation’s payment …show more content…
The European Central Bank (ECB) located in Frankfurt, Germany was modeled after the U.S. Federal Reserve.
-similar institutional structures/organization
- principle role/objective: Maintain stable prices and promote economic growth
“Central banks stabilize consumer prices using a policy interest rate (usually the overnight rate) as the key monetary policy tool. If the economy is growing quickly and inflation pressures are mounting, the central bank steps on the brakes by raising interest rates. If the economy is slumping, the central bank cuts interest rates.”
Source: http://payden.com/pdf/POV_Q411_Article_1.pdf
The U.S. Federal Reserve is governed by a Board of Governors, which includes seven (7) members appointed by the President of the United States and confirmed by the Senate. The Chairman of the Federal Reserve holds the most power. This position is currently held by Janet L. Yellen, the first woman to ever been elected chair the Board of Governors of the Federal Reserve. There are twelve (12) Federal Reserve banks (Atlanta, Boston, Chicago Cleveland, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, St. Louis and San Francisco – each acts as a central banker for the private banks in their region). Similarly, the ECB is headed by an executive board, compromised of a President, Vice-President, and four (4) members nominated by Eurozone countries. There
The constitutionality of the Federal Reserve System (FED) has been a topic of debate for many years.
Since its conception over 100 years ago, people/critics continue to question whether Congress had the authority to delegate such power to a private institution, which controls our money supply, thus impacting our national economy. …show more content…
Currency could be issued by almost anyone…There were many problems that stemmed from this, including that some currencies were worth more than others. Some currencies were backed by silver or gold, and others by government bonds. There were even times when banks didn’t have enough money to honor withdrawals by customers…This is why the Fed was created.”
Main objectives of the FED
The FED is responsible for (or The responsibilities of the FED include:)
i. Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates. ii. Supervising and regulating banking institutions iii. Maintain the stability of the financial system and containing systematic risk that may arise in financial markets iv. Providing financial services to depository institutions, the US government, and foreign official institutions, including playing a major role in operating the nation’s payment …show more content…
The European Central Bank (ECB) located in Frankfurt, Germany was modeled after the U.S. Federal Reserve.
-similar institutional structures/organization
- principle role/objective: Maintain stable prices and promote economic growth
“Central banks stabilize consumer prices using a policy interest rate (usually the overnight rate) as the key monetary policy tool. If the economy is growing quickly and inflation pressures are mounting, the central bank steps on the brakes by raising interest rates. If the economy is slumping, the central bank cuts interest rates.”
Source: http://payden.com/pdf/POV_Q411_Article_1.pdf
The U.S. Federal Reserve is governed by a Board of Governors, which includes seven (7) members appointed by the President of the United States and confirmed by the Senate. The Chairman of the Federal Reserve holds the most power. This position is currently held by Janet L. Yellen, the first woman to ever been elected chair the Board of Governors of the Federal Reserve. There are twelve (12) Federal Reserve banks (Atlanta, Boston, Chicago Cleveland, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, St. Louis and San Francisco – each acts as a central banker for the private banks in their region). Similarly, the ECB is headed by an executive board, compromised of a President, Vice-President, and four (4) members nominated by Eurozone countries. There