Term
| Five major components of the Fed |
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Definition
- federal reserve district banks
- member banks
- board of governors
- federal open market committee (FOMC)
- advisory committees |
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Term
| federal reserve district banks |
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Definition
- 12 national districts
- New York is considered most important
- member banks must purchase stock
- each district has 9 directors |
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Term
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Definition
- clear checks
- replace old currency
- provide loans to member banks |
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Term
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Definition
- required of all nationally chartered banks
- at present, about 35% of all banks are member banks
- member banks hold about 70% of all bank deposits in the US economy |
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Term
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Definition
- composed of 7 members appointed by the president for a 14 year non-renewable term
- chair selected by President to serve a renewable 4 year term |
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Term
| roles of the board of governors |
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Definition
- regulate commercial banks
- control monetary policy |
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Term
| federal open market committee (FOMC) |
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Definition
| - made up of 7 members from the Board of Governors plus the presidents of 5 district banks |
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Term
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Definition
- achieve stable economic growth
- stabilize inflation |
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Term
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Definition
- federal advisory council
- consumer advisory council |
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Term
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Definition
| - one member from each federal reserve district |
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Term
| consumer advisory council |
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Definition
| - 30 members repesenting the financial institutions industry and consumers |
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Term
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Definition
- pre-meeting economic report (beige book)
- economic presentations
- FOMC decisions |
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Term
| role of the Fed's Trading Desk |
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Definition
- Fed purchase of securities
- Fed sale of securities
- Fed trading of repurchase agreements
- Control of M1 versus M2
- Consideration of technical factors
- Dynamic versus defensive open market operations |
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Term
| adjusting the reserve requirement ratio |
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Definition
| - reserve requirement adjustments affect money growth because higher reserves lead to less borrowing and lower reserves lead to more borrowing |
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Term
| adjusting the Fed's loan rate (discount rate) |
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Definition
| - as of 2003, loans are classified as primary credit and secondary credit and rates are set slightly above the fed funds rate |
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Term
| facilities created by the Fed |
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Definition
- Primary Dealer Credit Facility (PDCF)
- Term Auction Facility
- Term Securities Lending Facility (TSLF)
- Commercial Paper Facility |
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