What are the functions of the Federal Reserve System?

Answer 1

The role of the Federal Reserve banking system is to keep the American economy stable. It is supposed to be run by the very best economists and answer to a long list of private American banks. Each of them follows rules, good economics, and supports other banks in their region. Ultimately each regional bank has little say in where money goes. They defer to trusted investment bankers and the leaders of the National Federal Reserve Bank. The elite money-managers in Washington are led by Ben Bernanke and I'm guessing some very rich investors. The scheme is to loan money to the central banks of other countries like China, who then make money at a set rate from American taxpayers. It's reliable because taxes in America are more reliable than any other money flow in the history of the world. Debt is not offset by printed money because banks do not have the actual money to pay it back. Banks make money by investing more money than they actually hold in deposit for people and businesses. Each individual bank loans itself into bankruptcy, but because they are banks, they do not have to pay back money...people do not usually demand their money back. In the rare instance a bank fails, the Federal Reserve Bank bails it out and pays people their lost money. The Federal Reserve Bank operates the same way by loaning more money than it actually has. Its advantage is that all of America would have to demand money back before it has to pay. Its disadvantage is that richer countries would be the only ones able to bail us out if that ever happened. Over $$$7,000,000,000,000.00 has been spent by Congress, which it owes to the Federal Reserve Bank. Again, the debt is not offset by printed money because all combined banks do not have the actual money to pay it back. So don't tell anyone their bank has no money...it has Federal Reserve Bank notes which are good for now. There are plenty of conspiracy theories and communist reasons for not trusting banks with money. They pale in comparison to the powers banks uses now. They use military satellites to identify the flow of raw resources, shipping, and traffic flow in other countries. They use the terrorism as a justification for identifying every individual's transactions. They probably try and fail to play the Stock Market with military algorithms. They collude with the World Bank to break other country's currencies and introduce an economy based on resources for American dollars. What has happened lately is a contest between oil-extracting corporations and other corporations who deal overseas. The two towers fell to send a message to the world economy: oil and gold are worth a more now. The Bush Administration and Cheney represent companies that want a weaker dollar. They scared Congress into spending so much money (Rumsfeld also hid trillions in military spending) that our economy now has set interests. The security industries, the military industries, and the energy industries have hundreds of billions of dollars in profit because of the Administration's policies. The banks and economy in general now need to invest in corporations within those industries. A wartime economy worked in WWII, and the companies making a killing now expect the 7 trillion dollar debt to gradually go away when more of the money is spend on gasoline, guys with guns, and prisons. Banks are pressured to invest in these at higher interest rates because they make money, end of story.

Answer 2

It does exactly the opposite. Call me a conspirists, but this is how the system works. The Federal Reserve is a privately owned bank, which by the way is constitutionally illegal. When the reserve prints bills, it does it on loan to the federal government who then has to pay interest. The only way the government can pay the interest is to print money...do you see where this is going, a downward spiral into inflation. Do you know what federal income tax goes towards...no you do not, because they do not give you that information. Actually, if you ever see a document showing where that money goes, it is marked as undetermined (which they mark lost money). But the funny thing is nearly every year, to a couple of million dollars, the amount of money paid on interest to the federal reserve is the same amount as the federal income taxation of this nation.

In fact, ask you state senator for a document showing that you have to pay federal income tax. It is not a law, in fact, it is illegal for the government to charge you a federal income tax as in the constitution. There have been Supreme Court cases where they have ruled that the federal income tax is illegal, I'm sorry I don't have to court case, but I think it would be easy to look them up. It started with Polluck vs. Farmers' Loan & Trust Co. Wikipedia tries to do it justice, but fails miserably.

What I am saying is that the Federal Reserve and the Federal Income tax are the biggest fraud that the world has ever seen. Some people say that in the next couple of decades, the bonds that have been issued from the federal reserve will lose their value as the bankers see fit and if that happens our economy plunges.

I hope you don't have to write a report about this, what they should be teaching is how contrary to popular belief the Federal Reserve System is an inhibitor of our economy.

Answer 3

The Federal Reserve System is a group of private banks closely regulated by State and Federal Governments for the purpose of controlling the volume of money and monetary instruments in a particular country or group of countries. Outside of the United States this is done by a Central Bank. The balance of this volume and the demand for goods and services determines the price their price level (inflation when they increase, deflation when they decrease).

Answer 4

The primary responsibility of the Board members is the formulation of monetary policy. The seven Board members constitute a majority of the 12-member Federal Open Market Committee (FOMC), the group that makes the key decisions affecting the cost and availability of money and credit in the economy. The other five members of the FOMC are Reserve Bank presidents, one of whom is the president of the Federal Reserve Bank of New York. The other Bank presidents serve one-year terms on a rotating basis. By statute the FOMC determines its own organization, and by tradition it elects the Chairman of the Board of Governors as its Chairman and the President of the New York Bank as its Vice Chairman.

Answer 5

The federal reserve has three main tools it uses to bring about its goals if full employment, healthy inflation and stability

The fed acts as a bank to all other banks, each bank must have an account with the fed in which they keep a certain percentage of their checkable deposits as reserves. This percentage is mandated by the fed.

The fed also loans money to banks on a short term basis in order to help banks out of liquidity "jams", this is frowned upon by the fed, who would much rather see banks borrow to each other.

The rate at which banks borrow from each other is heavily influenced by the Fed and it is called the federal funds rate. This is an interest rate, and most other interest rates are tied in with this one, so the Fed can influence interest rates in this way.

The Fed also conducts open market operations, in which they buy or sell bonds from the public in order to increase or decrease the supply of money in the US economy.

The Fed prints money. It places the money in circulation by buying government bonds. This means that every $ is essentially an IOU to the Fed for which the government (tax paying citizens at least) pays interest as long as it is in circulation. The checkable deposits each bank holds in their FED account accumulate date in the form of interest owed by Gov to the Fed. There is no enough money in circulation to ever pay off this accumulated debt.

Answer 6

• Deciding the Nations Monetary policy
• Supervising and regulating the banks in the country
• Maintaining the stability of the financial system
• Providing financial services to the banks and other financial institutions in the country

The Federal Reserve is in USA

Answer 7

The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.

Today, the Federal Reserve's duties fall into four general areas:

• conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
• supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
• providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

[Taken from the Federal Reserve System, Purposes and Functions, published by the Board of Governors of the Federal Reserve System]

Answer 8

According to Wikipedia, the roles of the US Fedeeral Reserve are to conduct the nation's monetary policy, supervise and regulate banking institutions, maintain the stability of the financial institutions and provide financial services to depository institutions, the U.S. government andforeign official institutions.