Writer’s Name
Instructor’s Name
Course
Date
Economics
Federal Reserve System
Federal Reserve System or FED is basically a central banking system of USA that created on December 1913, due to severe financial conditions. Now this is playing different functions for boosting the USA economy those are: * Working as a central bank for United States * Address about the financial severe problems * Regulates and instruct the other banking systems * Control monetary policy through manage the money supply in the economy * Provide the financial facilities to other financial institutions, US government to strengthen the economy of US * Provide the major facility of exchange of payments in the different regions. * It also play a role in maximizing employment, stability of price level as well as long term moderate interest rate in the economy. * Open market operations in which selling and purchasing of government securities occurs by the FED. These operations are in the control on the FOMC.
So it basically plays a role in providing largest payment system in the world. Every day many transactions occur between the different sellers and purchasers of goods in term of US dollar. It also maintains millions of accounts as well as performing a role in settling and clearing different financial institution payments through intermediaries. FED play a vital role in providing the facility of financial services to depository institutions like distributing currency and coins, transfer funds and securities through clearing house system and collecting checks.
FED Role in 2000 on US Economy
In 2000 the US federal budget was in surplus that was $236 Billion and more than the preceding years those showed the deficit condition. This surplus then used buy back privately held government debt over the last five years. Due to rising in the oil prices that