Complexities of the Us Financial System Essay

1371 WordsMay 24, 20136 Pages
Assignment One: Complexities of the U.S. Financial System Christine Capell Professor.Umair Warsi FIN 100 - Principles of Finance May 5, 2013 The US financial markets impact the economy, businesses, and individuals in a variety of ways, one of which is providing a way for businesses to raise capital by issuing securities. The capital markets enable new companies to raise funds to grow. Typically, banks would not lend in these situations because of the lack of sufficient collateral and high risk. Without the public securities markets or private venture capitalists to provide the funding for these higher risk investments, the economy would be much smaller. The markets and the economy are closely linked and are especially reactionary…show more content…
There are 12 Federal Reserve districts each of the Federal Reserve District Bank. The Federal Reserve Bank’s responsibilities include: holding reserve balances for depository institutions and lending to them at the discount window, propose discount rates, furnish currency, collect and clear checks and transfer funds for depository institutions, handle U.S. government debt and cash balances. The Board of Governors consists of seven appointed members whose responsibilities are setting the reserve requirements and improving discount rates as part of monetary policy, supervise and regulate member banks and bank holding companies, establish and administer protective regulations and consumer finance and oversee the Federal Reserve Banks. The Board of Governors is advised by the Consumer Advisory Council, the Federal Advisory Council, and the Thrift Institutions Advisory Council. The Federal Open Market Committee, which consists of the Board of Governors and five Reserve Bank presidents, directors open-market operations-the Fed’s primary instrument of monetary policy. The Federal Reserve chairman, currently Ben Bernanke, is generally recognized as both the most powerful influence on monetary policy in the nation and one of the most formidable and influential global financial positions. The Fed’s policy of the past four years has only been partially effective. As the only central bank was a dual mandate, to control inflation and
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