Feb Reserve

Most people in our society today know that our government plays a key role in how smoothly our economy operates. It’s very important that we understand how the government acts as a safeguard for our economy and often have regulated policies set in place to make sure that our economy in stable.

Fundamental solutions to understanding the role that our government plays in the U.S. economy remain upon the Federal Reserve who regulates our national financial banking institutions. As an investor, it is very important that one knows that basics as it concerns the role of the Federal Reserve System. According to Croushore (2012), the Fed is definitely an organization that determines United States monetary policy, oversees many U.S. financial institutions, and ensures functioning of payments systems.

According to Croushore (2012), the Federal Reserve System has three main parts: Federal Reserve banks, the Board of Governors, and lastly the Federal Open Market Committee (FOMC). Now the Board of Governors is located in Washington, D.C., heads up the nationwide tasks such as determining banking regulations. The twelve Federal Banks, located around the world, work on local obligations such as examining the banks within their district, clearing checks, as well as providing banks with currencies and coins. The FOMC, which determines monetary policy, is composed by the seven members of the Board of Governors and five of the presidents of Federal Reserve banks. Because the committee receives input from the Federal Reserve banks around the world, it is less likely to be dominated by the viewpoint in New York or Washington.

The Federal Reserve main concern is preserve monetary development, extreme altitudes of work; improve expenses which preserve buying authority such as the dollar bill and practical extended periods of interest taxes. The Federal Reserve position consists of nurturing respectable investment organization as well as an unbroken nation. In order to achieve their assignment, the Federal Reserve functions as the investors’ depository, administrations reservoir, as well as controller of monetary organizations including the country’s currency administrator (Croushore, 2012).

According to Croushore (2012), the Federal Reserve was born as a part private and part government agency with power and influence decentralized around the country. Bankers had input into the Fed but could not control it. The checks and balances built into the structure were similar to that setup by the federal government itself. Despite the diffusion of power, many people even today distrust the Federal Reserve, knowing that the original idea for it was hatched by a small group of wealthy men (Croushore, 2012).

According to Evans (2011), the Fed used all of its accessible tools as well as new ones to boost up the financial system after the Wall Street meltdown in 2008 as well as gave our country and extraordinary amount of support during