federal reserve final-ppt system

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The Federal Reserve System Group C Members include Our teacher Hiran Gunasekara Thurs class 12:30-1:50 Oct 1, 2009 William Raymond Ailyn Smith Alexandria Salinas Brandon Lopez David Mitchell Eco nom y Mo ne y & Bank ing 3331 -350

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Federal reserve final-ppt system and structure for econ

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Page 1: Federal reserve  final-ppt system

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

Page 2: Federal reserve  final-ppt system

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

Page 3: Federal reserve  final-ppt system

First Bank of the United States

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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

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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.

Page 6: Federal reserve  final-ppt system

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

Page 7: Federal reserve  final-ppt system

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

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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

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I n te res t Ra tes

Federal Fund Rate

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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.

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Federal Reserve System

Duties and Responsibilities

Brandon Lopez

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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

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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

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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

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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

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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

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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

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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

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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

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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%

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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

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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