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What does the fed do? (central bank)
What are its orgins
They hold reserves.
Many people are reisitant to a centralized bank.. Fear of centralized power and moneyed interests
First 2 banks terminated in 1811 and 1836
after 1836 many bank panics occured - The federal act of 1913= creats decentralized system that was more politically accceptable
Four groups were empowered within the system to preform separate duties?!
a. The 12 federal reserve banks
b. private commercial member banks
c. The board of govenors
d.The federal open market commitee
* all banks with national charter must be Fed member; banks with charters have the option of joining..
Quasi-public organization (fed)
owned by private commercial banks in each distrist: those commercial banks buy stock in their district bank but they have very litle control unltimately...
MEMBER BANKS OWN FED
What do the member banks of the Fed get to do?
Each of the regional FED banks has 9 directors who apoint the president of the bank..
Three directors are professional bankers chosen member banks...
Three directors are prominent leaders of the industry, labor and agriculture.. chosen by memer banks..
Three directors are appointed by BoG are not allowed to be officers, employees or stockholders of banks