bell ringer 1.what type of financial institution offers full financial services and forms the...
TRANSCRIPT
Bell Ringer1. What type of financial institution offers full
financial services and forms the largest part of the financial system?
2. What type of financial institutions is often formed by people who work in the same industry?
• Hint- there are 3 types of financial institutions to choose from
Money and BankingThe Federal Reserve System
Chapter 21Section 2
The Federal Reserve SystemStructure and Organization
Central Bank of the United States is the Federal Reserve System. - AKA the “FED” - Banker’s bank - 12 Federal Reserve Districts
Board of Governors
- 7 members - President appointed/senate ratified - President selects one to chair for a four year term.
The Federal Reserve SystemAdvisory Council
The Fed has several advisory council.
Federal Open Market Committee (FOMC)- A major policy-making group which makes decisions that affect the economy as a whole by manipulating, or controlling the money supply.
Functions of the FED
The Fed as Regulator
Oversees and regulates large commercial banks
The Federal Reserve System Functions of the FED Continued
Acting as the Government’s Bank - Holds the government’s money - Sells U.S. government bonds and Treasury Bills - Manages the nation’s currency.
How Monetary Policy Works
Monetary Policy- The controlling the supply of money and cost of borrowing the money- credit- according to the needs of the economy.
The Federal Reserve SystemHow Monetary Policy Works
Continued
Changing the Supply of Money
Monetary Policy Tools
Discount Rate- The rate the fed charges member banks for loans.
Reserve- Requirement for member banks must keep a certain percentage of their money in a Federal Reserve Banks as reserve against their deposits
Open Market Operations-The purchase or sale of U.S. government bonds and Treasury bills
Federal Reserve System
• Regulate financial System– Rules written that other banks must follow
• Maintain Currency– Coins printed and distributed
• Government Bank– Tax $ goes here and Social Security comes from
here
Exit Slip• Identify and evaluate benefits
and disadvantages from eliminating all coin money.