FIN 4313 Chapter Notes - Chapter 2: Federal Open Market Committee, Federal Reserve System, Federal Reserve Note
Document Summary
Each district has a president: the fed consists of the board of governors (bog) Act as a depository for banks in their respective districts, monitor local economic. Issue federal reserve notes conditions, provide advice to the federal reserve board, participate in the making of monetary policy: federal open market committee (fomc)- (cid:272)o(cid:374)du(cid:272)t the (cid:374)atio(cid:374)"s (cid:373)o(cid:374)etar(cid:455) poli(cid:272)(cid:455) Members serve 14 year terms chairman, vice chair (4 year terms) Aim to impact credit availability and interest rates. E(cid:454). rrr is (cid:1005)(cid:1004)%, (cid:271)a(cid:374)k has (cid:1004),(cid:1004)(cid:1004)(cid:1004) = (cid:271)a(cid:374)k"s rr is ,(cid:1004)(cid:1004)(cid:1004) Emergency loans to member banks (reduce rates) Chapter 2: the federal reserve and its powers. If the fed wants to reduce money supply, it will sell government securities and reduce the reserves of the purchasing dealer. Discount rate raised banks are inclined to borrow less at the discount window banks make fewer loans or reduce their investments reduces the amount of reserves reduces money supply. Paying interest on reserves: raising fed funds rate:
