Our teacher Hiran Gunasekara Thurs class 12:30-1:50 Oct 1, 2009

Members include

Economy

Money

&

Banking 3331-350

History and understanding Structure of the federal Reserve What are the duties and responsibilities What is the Federal Open Market Committee

William Raymond &Ailyn Smithstructure Brandon Lopez duties and responsibilities

David Mitchell- FOMC

Alexandria Salinas- Monetary policy

Fed conducts monetary policy

Index

Members Role

First Bank of the United States

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

The Federal Reserve understanding

Established in 1913 Its a independent entity It was created by congress Has 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.

By William Raymond and Ailyn Smith

Currently there are 5 board of governors that oversee everything that happens in the fed. And serve a 14 year term 2009 Members of the FOMC
Members

Ben S. Bernanke, Board of Governors, Chairman William C. Dudley, New York, Vice Chairman Elizabeth A. Duke, Board of Governors Charles L. Evans, Chicago Donald L. Kohn, Board of Governors Jeffrey M. Lacker, Richmond Dennis P. Lockhart, Atlanta Daniel K. Tarullo, Board of Governors Kevin M. Warsh, Board of Governors Janet L. Yellen, San Francisco

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 Banks continued

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 policy The 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 dont have to disclose that information.

This is the New York Federal Reserve Bank on 33 liberty street.

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.
Reports By 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.

Duties and Responsibilities

Brandon Lopez

What are the Federal Reserves 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 Policy Supervision & Regulation Consumer & Community Affairs Payment System

Monetary Policy
The Federal Reserve must manage the nations monetary policy by helping influence money and credit conditions in the economy that focuses on employment throughout the nation and reasonable prices.

Goals Monetary Policy affecting the Economy Limitations Guides

Monetary Aggregates Interest Rates The Taylor Rule Foreign Exchange Rates

Supervision & Regulation

The Federal Reserve must supervise and

manage banks to make sure that the nations banking and financial system are safe and secure. They must also protect the credit rights of all financial institutions clients.
Responsibilities Federal Financial Institutions Examination

Council Supervisory Process Regulatory Functions

Consumer & Community Affairs

The 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.
Responsibilities Consumer Protection

Community Affairs

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 nations payment systems.
Congress

Financial services
Fiscal Agency Services

Monetary policy is made by the FOMC (Federal Open Market Committee)

1. Seven members on the board of governors 2. Five reserve bank presidents 3. Meet eight times a year

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

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

Reserve Requirements
1. Raise the Amount- Reduce Lending 2. Lower Reserve Amount- Increase Lending 3. Not changed much, last change was in 1992 from 12% to 10%

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

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.