【正文】 ll Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 17 Goals and Policy Tools of the Fed ? The Great Depression brought about a concentration of power within the Fed. ? The sevenmember Board of Governors in Washington, ., became the central administrative and policymaking group. ? In addition, the Federal Open Market Committee was created to oversee the conduct of open market operations, which rapidly became the Fed’s main policy tool. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 18 How the Fed is Organized Board of Governors (7 members appointed by the president) 3,200 member banks of the system Supervise Manager of the System Open Market Account Supervise 12 Federal Reserve banks amp。 services Economic goals: ?Full employment ?A stable price level ?Sustainable economic growth ?A stable balanceofpayments position Cost amp。 growth of borrowing amp。Money and Capital Markets 12 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by YeeTien (Ted) Fu Money Market Instruments: Commercial Paper, Federal Agency Securities, Bankers’ Acceptances, and Eurocurrency Deposits ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 2 Money and Capital Markets 13 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose Slide by YeeTien (Ted) FuThe Roles and Services of The Federal Reserve amp。 spending by the public on domestic amp。 availability of credit Size amp。 25 branch banks (reserve bank presidents appointed by Board of Governors) Supervise Federal Open Market Committee (12 voting members) Serve Serve ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 19 How the Fed is Organized ? In principle, the Board of Governors is independent of both legislative and executive branches of the federal government. ? This independence is supported by terms of office much longer than the president’s (up to 14 years), and by the fact that the Fed is selfsupporting (it reported operating ine of $34 billion in 2020). ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 20 How the Fed is Organized ? When the Federal Open Market Committee (FOMC) has reached a consensus on the appropriate future course for moary policy, a directive is given to the manager of the System Open Market Account (SOMA) ? The SOMA manager is a vice president of the Federal Reserve Bank of New York. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 21 How the Fed is Organized There is a Federal Reserve bank in each of the twelve districts. Source: Board of Governors of the Federal Reserve System ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 22 How the Fed is Organized ? Each Reserve bank houses a research division that studies regional economic and financial developments, and reports its findings to the Board of Governors and to the FOMC. ? The Reserve banks also provide the securities needed for open market sales, and take their pro rata share of security purchases made by the Federal Reserve System. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 23 How the Fed is Organized ? The member banks of the Federal Reserve System consist of national banks, which are required to join the system, and statechartered banks that agree to conform to the Fed’s rules. ? At yearend 2020, there are 2,230 national banks and just under 1,000 statechartered banks registered as members of the Federal Reserve System, pared to more than 5,000 nonmember banks. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 24 Roles of the Federal Reserve System Today ? Collecting and clearing checks and other means of payment (through an electronic work known as the FEDWIRE) ? Issuing currency and coin ? Maintaining a sound banking and financial system, by serving as a lender of last resort (through the discount window of each Reserve bank) and by supervising member banks ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 25 Roles of the Federal Reserve System Today ?Serving as the Federal government’s fiscal agent, by holding the Treasury’s checking account and by maintaining reasonable stability in the government securities market ? Providing information to the public, through statistical releases and research reports ? Carrying out moary policy, through the use of various tools ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 26 The Key Focus of Central Bank Moary Policy ? In regulating money and credit conditions to strengthen the economy, most central banks target market interest rates. ? To impact market rates, central banks usually make use of their control over the volume of reserves available to the banking system. ? These reserves are the raw material out of which depository institutions create credit and cause the money supply to grow. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 12 27 The Key Focus of Central Bank Moary Policy ? The total supply of reserves can be changed ?through open market operations, ?by making loans to depository institutions through the central bank’s discount window, and ?by changing the legal reserve requirements applicable to deposits held by depository institutions. ? 2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin