Federal Reserve and Monetary Policy Part 2 of 13
Federal Reserve and Monetary Policy Part 2 of 13
Independent Within Government
The Federal Reserve System was structured by Congress as a distinctively American version of a central bank, established to carry out Congress own constitutional mandate to coin money and regulate the value thereof. Part of the Feds uniqueness is that it is decentralized, with Master Trading Futures Reserve Banks and branches in 12 districts across the country, coordinated by a Board of Governors in Washington, D.C.
The Fed has a unique public/private structure that operates independently within government but not independent of it. The Board of Governors, appointed by the president and confirmed by the Senate, represents the public sector, or governmental side of the Fed. The Reserve Banks and the local citizens on their boards of directors represent the private sector. This structure provides accountability while avoiding centralized, governmental control of banking and monetary policy.
The Federal Reserve The Affluent Desktop Currency Trader is fiscally independent because it receives no government appropriations. The Fed funds its activities with the interest earned from loans to banks and investments in government securities and from the revenue received from providing services to financial institutions. The Feds financial goal in providing services is to generate only enough revenue to cover costs. Any excess earningsmoney made above the cost of operationsis turned over to the U.S. Treasury.
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