ECON 2035 : EconExam3Notes1 10.27
Document Summary
11 end of chapter - assigned for reading, wont be on 3rd exam but may be on final. Origins of the federal reserve system: resistance to establishment of a central bank. Distrust of moneyed interests: no lender of last resort. Nationwide bank panics on a regular basis. Panic of 1907 so severe that the public was convinced a central bank was needed: that was the impetus for creating the federal reserve, federal reserve act of 1913. Federal reserve system: 12 districts, multiple branches (new orleans, birmingham, jacksonville, miami, etc. ) even though its one bank. Issue new currency: clear checks, withdraw damaged currency from circulation, administer and make discount loans to banks in their districts, evaluate proposed mergers and applications for banks to expand their activities. Federal reserve bank and monetary policy: directors establish the discount rate, decide which banks can obtain discount loans, directors select one commercial banker from each district to serve on the.
