The Workings And Structure Of The Federal Reserve Banks Of Usa

1507 Words7 Pages
The United States of America’s financial system comprises of the banking system, financial markets and nonbank financial institutions. (Lee, 2001) Banking system furthermore consists of the Federal Reserve System, foreign banks, commercial banks, offshore banks, credit unions and saving institutions. Financial markets consist of debt and money markets, equities markets and futures and options markets. Lastly, nonbank financial institutions consist of asset-based finance companies, commercial lending companies and insurance companies. This paper is an endeavor to understand the workings and structure of the Federal Reserve Banks of USA. Founded by the U.S. Congress in 1913 the central bank of the United States called the Federal Reserve Bank is ranked as the most powerful financial institution in the world with an aim to offer the nation a safe, flexible and stable monetary and financial system. (Board of Governors of the Federal Reserve System, 2005) Bearing the responsibility for a specific geographic area of the U.S. the central bank is structured on a federal system comprising of a central governmental agency in Washington, DC commonly called the Board of Governors and 12 regional Federal Reserve Banks spread all over the country. The Federal Reserve Bank is an independent entity as the President or any other government official cannot ratify its decisions. Nevertheless, it is still subject to Congressional supervision and ought to work within the framework of the
Open Document