INTRODUCTION

US Federal Reserve System(Central Bank Of America)

•To conduct the nation’s monetary policy,
•To provide and maintain an effective and efficient payments
system, and
•To supervise and regulate banking operations
 Instruments Of Federal Monetary Policy

• Discount Rate : Interest rate Reserve Banks charge commercial

banks for short-term loans.

• Reserve Requirements : Portions of deposits that banks must

hold in cash, either in their vaults or on deposit at a Reserve Bank.

• Open market operations : The buying and selling of U.S.

government securities.

• Interest on Reserves : Newest tool used by Fed. Interest on

reserves is paid on excess reserves held at Reserve Banks.