The Federal Reserve System is the central banking system of the United States created in 1913. It was created as a solution to the financial issues that occurred between 1906-1907. Over a period of time the responsibilities and powers latent within the Federal Reserve System has changed dramatically to fit the needs of the people at certain times. The Federal Reserve has three major principal responsibilities including: stable prices, interest rates that are long term and employment. The Federal Reserve is also responsible for conducting investigations and doing research on current economic trends of the United States.
The Federal Reserve is made up of an appointed Board of Governors, Open Market Committee and 12 banks that are located throughout the United States. The Open Market Committee is responsible for setting policies for all of the financial interaction that go on within the Reserve. The reserve functions efficiently by having parts that are both public as well as privately operated. The Federal Reserve operates under the scrutiny of the United States Congress both the House of Representatives as well as the Senate play a role.
The Duties of the Responsibilities of the Federal Reserve of the United States are vast and can be sometimes complex. One duty of the Reserve stems back to its inception. The Federal Reserve is responsible for handling all financial crisis of the country. Also it serves as the central bank of the United States. The Federal Reserve balances out the powers between bank interest and government powers. The Reserve successfully accomplishes this by supervision different banking institutions and being committed to protecting the customers. These services allow the Federal Reserve to take some of the pressure off the Treasury.
One of the chief responsibilities of the Federal Reserve is to maintain maximum employment. In other words make sure there are always more than enough people working who can work. This way there will not be too much of a strain placed on the bank sending out money in forms of welfare, section 8 and other forms of government assistance. One of the ways that the Federal Reserve keeps an eye on the economic status of the United States is to collect labor statistics. This helps give the Reserve an idea of the effectiveness of a administration’s policies.
The Federal Reserve also is a self sufficient and self funded. The revenue coming into the Reserve comes from marketing operations. They sale financial services and discounted loans. The Reserve has two annual financial reports that have budgeting information. One list includes statements that have income and net profits or loses. The other list includes a more detailed summary of information with more reports of financial activity. The Federal Reserve system is a very important aspect of the United States of America.