What is the federal reserve system?

The federal reserve system, often referred to as a Fed, is an entity unique to the United States and serves as its central bank. He is accused of monitoring, regulation and administration of national currency, monetary policy and loan. It was conceived as an independent organization, managed by the Governor's Council and headed by a single chairman. In Addition to and Central Location in Washington, D.C. America.

Unlike the Central Banks of Virtual Ever Other Country in the World, The Federal Reserve System is Unique in That Its Not Print The United States' Own currency, that task is carried out by the Ministry of Finance. As an independent entity is not the system of the Federal Reserve System The subject of direct control by elected officials of the United States, ACKOLI Her highest -level employees are appointed politicians and are to operate outside the political system. However, the government will receive all the profits earned by the Fed after salaries and other expenditures, such as dividends are their private Membership.

Fed, as is currently organized, was founded in 1913, although the roots of the central banking system in the United States date back to their founding fathers. Alexander Hamilton, the first secretary of the Treasury, was a strong supporter of the centralized bank, although early iterations were not given sufficient power to enforce the national monetary policy and thus failed. Until the establishment of a strong national economy in the 20th century, the need for a federal reserve system reached a turning point.

Since its foundation as a limited managing authority, the Federal Reserve System has gradually gained more powers in shaping fiscal policies of the United States.Given the superiority of the US dollar (USD) in the international economy, Fed events are carefully explored and often subject to great criticism and controversy. Economic volatility is often accused of actions or inactivity of the Fed, and the results of quarterly meetings of its Governor Council often deeply affect global stock markets.

In addition to the indirect impact of its internal decisions, the federal reserve system has tools that directly affect the US financial system. He buys and sells US Treasury and Securities of the Agency in what is known as open market operations ; It may determine the amount that is discounted from the loans that Komerční banka collects; And it can also adjust the amount of money that banks are actually obliged to keep in their safes, which is known as a reserve requirement . The Fed and its Cvoster may decide to have any of these tools in an effort to maintain a stable fiscal environment in the US.