Question

what are structure and functions of monetary institutions in the United States?

Answer 1

The Structure and Functions of the Federal Reserve System

The US central bank is the Federal Reserve System. It was developed by Congress in 1913 to provide a healthier, more efficient, and more secure monetary and financial system for the country. Over the years it has extended its role in banking and the economy. The Board of Governors, based in Washington , D.C., provides oversight for the program The Board of Governors is the regional portion of the Federal Reserve System , also known as the Federal Reserve Board. The Board is made up of the seven Governors appointed by the President and confirmed by the Senate. Governors serve 14-year terms that are staggered over time to ensure stability and continuity.

The Chairman and Vice-Chairman shall be named for a period of four years and may be reappointed subject to a term limit. The Board also exercises strong supervisory authority over the financial services sector, administers some regulations on consumer protection and regulates the payments system of the country. The Board monitors Reserve Banks' operations, approving the names of their presidents and other members of their boards of directors. The Board sets reserve conditions for depository institutions and recommends changes to the discount rates that Reserve Banks recommend. The Board finances its operations by assessing the banks of the Federal Reserve rather than by Congressional appropriation. A public accounting company audits its financial statements quarterly, and the General Accounting Office also audits those reports.

Under the general supervision of the Board of Governors a network of 12 Federal Reserve Banks and 24 branches make up the Federal Reserve System. Reserve Banks are the central bank 's working arms.

Each of the 12 Reserve Banks represents their country area, and all but three have other district offices to assist in providing services to depository institutions and the public. Banks are named for their headquarters locations-Boston , New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, City of Kansas, Dallas and San Francisco.

The Federal Open Market Committee, or FOMC, is the body that determines monetary policy for the Fed. It is responsible for formulating a strategy aimed at promoting stable prices and economic development. To put it simply, the FOMC manages the money supply to the country.

The FOMC's voting members are the Board of Directors, the president of New York's Federal Reserve Bank and the presidents of four other Reserve Banks, who serve on a rotating basis. All the presidents of the Reserve Bank engage in discussions on FOMC reform. The President of the Board of Governors presides over the FOMC.