1 / 19

The structure of the federal reserve

The structure of the federal reserve. Federal Open Market Committee (FOMO). Advisory Councils. The Federal reserve system. Created in 1913 Board of Governors Appointed by the President for one 14-yr term Must be approved by the Senate One members term expires every 2 years

ciro
Download Presentation

The structure of the federal reserve

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The structure of the federal reserve

  2. Federal Open Market Committee (FOMO) Advisory Councils

  3. The Federal reserve system • Created in 1913 Board of Governors • Appointed by the President for one 14-yr term • Must be approved by the Senate • One members term expires every 2 years • Chairman  Ben Bernanke

  4. The Role of banks • Banks are a business with the same profit making goals of any other business. • They make a profit by providing services

  5. Role of banks • They provide safety and interest income for depositors • A source of loans for people in business • How does a bank make a profit? a. By charging higher rates of interest to borrowers then they pay to depositors b. Credit cards

  6. Bank assets and liabilities • An asset is something you own a. Loans b. Bonds c. Real estate d. Cash reserves

  7. Liabilities are something you owe. • Checking and saving account deposits • Loans from the Federal Reserve • Money owed to stockholders

  8. Federal Deposit Insurance Corp. • Stop runs on banks • $250,000

  9. Competition for banks • Tax shelters, 401K plans, Roth IRA’s • The Stock Market • Credit Unions

  10. Modern banking

  11. Fractional reserve banking www.classzone.com

  12. Common loans banks make Mortgage • Real estate • Lender & borrower • Monthly • Lender

  13. Credit cards • Issued by banks to users • Pays; lends • Repaying

  14. Banking deregulation Bank Mergers • Larger banks acquired smaller ones • Smaller ones joined forces to enter different geographic markets

  15. BENEFITS • Increased competition which keeps interest rates low • Increase in the number of bank branches

  16. CONS • Fewer banks to choose from • Big banks show less interest in smaller customers

  17. Banking Services Financial Services Act of 1999 • Allowed banks to sell stocks, bonds, and insurance

  18. Technology & Banking • ATM’s – allow customers to bank without seeing a bank officer • Debit Cards – Can be used to withdraw cash to make a purchase • Stored – value cards – Represent money that the holder has a deposit with the issuer (gift cards)

More Related