The Federal Reserve System



The Federal Reserve System

Introduction

This paper has been designed and defined for the purpose of understanding how does the Federal Reserve System work and functions in the United States of America. Here, we shall pertain to analyze the kind of functions the unit itself pertains to perform and at the same time paves way for the purpose and objective of creating an effective and efficient reputation with reference to the work it does today. In addition, the paper shall also comprise information and date regarding the kind of responsibilities the department paves way to perform and execute with compliance, contributing to the State's position today.

Describe the origin of the Federal Reserve System. In your description include the organizational structure of the Federal Reserve System.

The Federal Reserve System (FED) has been designed to keep track of the money supply, expansion and contraction of the flow of money and its circulation within the economy. Considered and notified as the Central Bank of the United States of America established a year prior to the First World War (1913, December 23), the Federal Reserve System has been in the process of creating an effective and efficient representation in terms of delivering and maintaining operations of money flow and business transactions and addressing banking traumas, dissolution or even major meltdowns that may otherwise hinder economic progress.

The basic motivation of the FED has been is to strike sustainable, long-term balance with the leakages and injections of funds and resources in their country. The reason amongst which the country has established as a giant is largely because of the intervention and the decisions that have been brought forth and implemented by the FED single-handedly (Carosso, 1973).

Identify the major components of the Federal Reserve System and describe the role of each component.

The Federal Reserve System, in its almost 100 years of service, has evolved significantly and continues to modify according to the needs and wants of the economy and the institutions that continue to be present in the economy. To list down, there are four (4) major heads of service that make the Federal Reserve System known to us today. These include:

the Board of Governors appointed through a presidential election (more formally known as the Federal Reserve Board), which are unanimously responsible for all the decisions that have to be made towards effective and prompt financial progress & stability, leading to economic development and progress. In the eyes of the Board, the FED is a separate, independent institution, such that all decisions taken on accounts of the monetary policy need not be approved, amended or considered negligible by the running Government of the time or even the Legislature that has been in practice for decades.

The Federal Open Market Committee (FOMC), which is responsible for undertaking all prevailing responsibilities and end-decisions for the purpose and objective of increasing and decreasing the circulation of stocks, bonds and other securities. One must understand that the kind of pressures involved in making stock floatation decisions could dramatically ...