Please enable JavaScript.
Coggle requires JavaScript to display documents.
Ch4 Fed reserve system, expansionary activity, discount rate decrease,…
Ch4 Fed reserve system
conduct monetary policy
supervise and regulate depo institutions
examination and inspection of member banks, companies, foreign bank
authority to issue warnings
approval of bank expanding its activity
maintaining stability of the fin sytem
provide payment and other fin serv. to us gov
Government agencies deposit and withdraw T-acc by fed reserve bank
depo from unemployment taxes and individual income taxes
Federal Reserve holds collateral put up by government agencies
Federal Reserve delivers government securities to investors
new currency issue
check clearing
wire transfer & research service
tools used?
open market operations (bond)
fed reserve board trading desk
policy directive which is a statement sent to fed res. from FOMC
reserve requirement
discount rates on loans by feds for fin inst.
to control bank reserves which leads to money supply or interest rates
why fed dont use it?
difficult to predict changes in bank discount dis. window
it effects the fin, market
Reserve deposits
required reserve
fed reserve require banks to hold
excess reserve
add reserves banks choose to hold
effect of monetary tools on eco variables
contractionary activities
open market sales of security
discount rates increase
reserve increase
expansionary activity
open market purchases of security
discount rate decrease
lower interest rates
reserve amount decrease
FIGURE 4-6