Describe the Federal Reserve's structure and primary functions.

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Resource: Federal Reserve Paper Grading Guide

Write a 1,050- to 1,400-word paper about The Federal Reserve's structure and functions.

Describe the Federal Reserve's structure and primary functions.

Explain the effect the Federal Reserve's policies have on financial markets, institutions and interest rates.

Access the Federal Reserve Economic data web page: https://research.stlouisfed.org/fred2/ In the At a Glance frame near the bottom of the page you will find eight data series. List all eight series of data and explain what the data portrays and its importance.

Format your paper consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment as a Microsoft® Word document.

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Explanation & Answer

Attached.

Running Head: FEDERAL RESERVE

1

Federal Reserve
Institutional Affiliation:
Date;

FEDERAL RESERVE

Federal Reserve is a ‘central bank’ of America formed in 1913 by Congress. It was
formed to act as a holder and reserve supplier for all commercial banks in the U.S. This
system was formed at a time when the banking sector faced serious issues and errors. These
errors were highly condemned by financial experts and analyst who demanded a change in
the system. Poor government regulations made banking difficult. Also, the difference in legal
reserve requirements between regions and national government differed which made banking
less flexible and risky. Creation of a federal reserve was meant to cure all these issues and to
ensure commercial banks offered correct amount from banks on time.
In its formation, federal reserves were divided into 12 banks. They were located in the
major cities. Each bank was independent of the other. Banks were named according to
regions they represented. Each had a board of directors and an executive flow which ensured
they operated well. It appointed the head and his assistant with the approval of the board.
They operated as branches of the main bank. Their main functions included supervising
commercial banks in their region depositing money, processing checks and electronic
payments to the public(Conti-Brown, P. (2017). They handle treasury payments, sell
government shares, manage treasury cash and help in investment activities. Commercial
banks would hold stock in reserve banks and earn dividends and this made them
stockholders, a requirement that they had to meet to become members of a federal bank.
The federal market committee was formed to make policies that will ensure money
supply and ensure stable prices to promote positive economic growth. It was made since the
integration of the economy, improved infrastructure and new technology needed organization
and policies to govern all that. Federal Reserve controlled discount rates and reserve bank
requirements while federal market c...


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