Does the Federal Reserve operate like an ordinary commercial bank? What is the Fed's job?

Expert Solution

Yes, the Federal Reserve operates like an ordinary commercial bank. It serves the U.S treasury which means it serves the public and the companies. So it is not a private co-operation. It is partially private and partially public. The income of federal reserve comes from cash, check the digital payment system to commercial banks. It is governed by seven members of the committee and is nominated by the president.
It performs three basic function - maintains monetary policy, taking responsibility of safe payment system, look after banking operation. Monetary policy means that it controls the funds to help interest over a long time, the amount of credit and money available in the market. The payment system ensures that there is enough money, processing cheques, and payment system, providing safe secure digital money transactions. It supervises other banks to maintain their financial stability.

Rahul Sunny answered 8 months ago

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