The Federal Reserve System of the US
The Central Bank of the United States is called the Federal Reserve System of the United
States. As it is known, United States as being one of the major countries and one of the
most relevant economies in the world they are really important in the economy of the
whole world. The Fed is independent as an institution but it lies within the government as
both a public and private entity. The Congress is the jurisdiction that takes care of the Fed,
and they have 12 banks all over around the country.
The Federal Reserve System has 4 areas of responsibility:
The first area of responsibility is to conduct the nation’s monetary policy by influencing
money and credit conditions in the economy in pursuit of full employment and stable
prices. What the Fed does is to take care of the purchases and sales of government
securities in the open market. This would help money and credit to be available in the
market at a rate(higher or lower) that they try to keep in order to have a stable economy.
They also take care of the discount rate of loans in order to get different results in the
market. Sometimes is more useful to keep the discount rate lower in order for loans to go
up. This action would increase spending, which means that there is going to be more
people investing. The Fed does the opposite if they think there is too much money in the
