Question

Discuss the basic Federal Reserve Bank functions and integrate Biblical principles in the discussion. Is the Federal Reserve Bank subject to higher powers?

Answer 1

Function of Federal Reserve Bank

1. Lender of last resort
2. formulate monetary policies
3. promote financial stability
4. regulate and supervise financial institutions
5. promote community development and consumer protection
6. support local and international payment

the FRB is answerable to the Congress, Board of Governors and 12 Federal Researve Bank

Explanation:

Federal Reserve Bank functions

1. Formulate monetary policies: the US Congress has mandated the Federal Open Market Committee to formulate laws that ensure price stability, create employment, and regulate the interest rate in the US.
2. Promote financial stability: it monitors the stability of the entire market by assessing potential risks that may destabilize the economy. It is permitted to engage both local and international stakeholders to guarantee the prosperity of the US economy.
3. Regulate and Supervise Financial institution: individual banks and financial institution are monitored by the Federal Reserve Bank to ensure they abide by interest rate caps, abide to set regulations and promote ethical business practices
4. Promote community development and ensure consumer protection: it formulates policies that are aimed at protecting consumers from exploitation while supporting financial investment in selected community projects.
5. Support payment locally and internationally: it ensures the safe transfer of funds with the country and internationally. Through switch technology, screening of payment is done before being routed to its final destination
6. Lender of last resort: the Reserve banks acts as a creditor to financial institutions that cannot get financial help elsewhere.

The Federal Reserve Bank is answerable to the Congress, Board of Governors, and 12 Federal Reserve banks.