Federal Reserve Bank System (the Fed)
The (blank) is the nation's central bank and acts as the banker's bank. The Fed's primary purpose is to regulate the flow of money and credit, and to promote economic growth with stability. The Fed develops national monetary policy and shares responsibili
Board of Governors
(BOG)
The Federal Reserve System consists of a seven-member (blank) headquartered in Washington, D.C., and a network of 12 Federal Reserve Banks (FRBs) located in major cities throughout the United States. For the purpose of carrying out these day-to-day operat
Monetary Policy
The primary responsibility of the Board of Governors of the Federal Reserve System is to formulate (blank). (Blank) refers to the actions taken by the Fed to influence the availability and cost of money and credit as a means of promoting national economic
Federal Reserve Bank (FRB)
Federal Reserve Banks are the operating arms of the central bank. They serve other lending institutions, the U.S. Treasury and, indirectly, the public. A Federal Reserve Bank (FRB) is often called the banker's bank, storing currency and coin, and processi
Federal Open Markert Committee (FOMC)
The (blank) is the most important monetary policy-making body of the Federal Reserve System. It is responsible for developing policies to promote economic growth, full employment, and stable prices. The (blank) makes key decisions regarding the conduct of
Does the Fed Implement Monetary Policy?
The Fed influences the supply of money and credit available, thus controlling the behavior of lenders and borrowers. These controls are far reaching, often affecting interest rates, jobs, and economies worldwide. To accomplish its goals, the Fed uses thre
Reserve Requirments
All member banks must set aside a certain percentage of their deposits as a reserve. The reserve is money that the banks cannot lend. The Board of
Governors sets the reserve requirements. The Board increases or decreases the amount of money in circulation
Discount Rate
A bank that needs to increase its reserve requirements would borrow money directly from the Federal Reserve Bank at the discount rate. A decrease in the interest rate allows more bank borrowing from the Fed. Bank borrowing increases money available for le
Federal Open Market Committee
(FOMC)
The (blank) of the Fed also buys and sells government securities, typically existing bonds, to influence the amount of available credit. The open market operations process is the most flexible and widely used technique for expanding or slowing the economy
Glass-Steagall Act
During the Great Depression, the (blank) was passed that prohibited commercial banks from collaborating with full-service brokerage firms or participating in investment banking activities.
Derugulation
(Blank) is a process whereby regulatory restraints are gradually relaxed.
Disintermediation
The first indication of a problem came in the late 1970s, when savers began to take their money out of savings and loan associations (S&Ls) and put it into investments that paid a higher rate of interest. This process, called (blank), began due to uncontr
Depository Institutions Deregulation and Monetary Control Act
(DIDMCA)
The (blank) of 1980 had sweeping changes, one of which was to raise deposit insurance from $40,000 to $100,000. It also permitted savings and loans to offer a much wider range of services that ever before. The deregulatory measures allowed S&Ls to enter t
Garn-St. Germain Depository Institutions Act
The (blank) of 1982 completed the process of giving expanded powers to federally chartered S&Ls and enabled them to diversify their activities.