Federal Reserve

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Bloomberg  3 hrs ago  Comment 
Jobs Hold Sway Over Yellen-Carney as Central Banks Set to Split Before the Federal Reserve and fellow central banks go to work raising interest rates, they first need others...
Reuters  9 hrs ago  Comment 
The Federal Reserve Bank of New York has found serious problems in Deutsche Bank AG's U.S. operations, including shoddy financial reporting, inadequate auditing and oversight and weak technology, the Wall Street Journal reported.
Benzinga  10 hrs ago  Comment 
Deutsche Bank AG (NYSE: DB) is suffering from a "systemic breakdown" that "expose the firm to significant operational risk and misstated regulatory reports," according to a letter from the New York Federal Reserve reported Tuesday. The bank's...
Bloomberg  10 hrs ago  Comment 
A U.S. council of regulators is poised to label MetLife Inc. a potential threat to the financial system, subjecting the insurer to oversight by the Federal Reserve, two people with knowledge of the matter said.
SeekingAlpha  10 hrs ago  Comment 
By Evariste Lefeuvre: Following my post on the labor mismatch, I focus today on a relationship that was first reported by Arthur Okun in 1962. The Okun's law reports a negative relationship between the unemployment rate (or positive with job...
SeekingAlpha  Jul 22  Comment 
By Thomas J. Feeney: Federal Reserve Chair Janet Yellen was prominently in the news again last week. Most of Wall Street's ire was directed at her for her comment that "…valuation metrics in some sectors do appear substantially stretched -...
SeekingAlpha  Jul 22  Comment 
[Originally published on 7/10/2014] It is so easy for a country to print money... Said another way, it is so easy for a government to create inflation. Because it's so easy, nobody believes that DEFLATION – the opposite of inflation – is...
Yahoo  Jul 22  Comment 
As the Federal Reserve Bank of Kansas City prepares to host next month's annual gathering of central bankers in Wyoming, seasoned Fed watchers from the financial markets, including the chief U.S. economists of the biggest American banks, aren't...




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The Federal Reserve is the third central bank of the USA. It was legally established on December 23, 1913, when US president Woodrow Wilson signed the Federal Reserve System Act. The Federal Reserve was blamed to have deepened the Great Depression after the crash of 1929. In a panicky reaction it then deflated money supply, causing a lasting and deep economic contraction.

In the inflationary period from 1973 - caused by the first oil shock - to 1981 chairman Paul Volcker managed to battle inflation successfully by raising the leading interest rate to more than 20%. At the same time Volcker succeeded in keeping the economy out of a drawn-out recession.

The policy style changed with the nomination of Alan Greenspan in 1987. Only 2 months into office Greenspan was confronted with the Black Monday of 1987, when the Dow Jones Industrials Average fell 22%, its biggest loss ever in a day. Remembering the fatal results of tight liqudity after the crash of 1929 Greenspan offered banks all the funds they needed in order to avoid a meltdown of the stock market. Alan Greenspan can also be credited with blowing up the biggest debt bubble of all times in the new millennium. By lowering the Fed Funds rate to a record low of 1% the Federal Reserve contributed heavily to the American housing boom that turned out to be a bubble based on easy credit. Greenspan conceded in 2008 to Congress that he erred on wrong side when the Federal Reserve thought that the financial industry should not be burdened with more oversight. At this time the USA had fallen in the biggest financial crisis ever.

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Please teach the rest of these internet hooliagns how to write and research!

The Federal Reserve Banks

The 12 Federal Reserve Banks were established by Congress as the operating arms of the nation's central banking system. Many of the services provided to depository institutions and the federal government by this network of Reserve Banks are similar to services provided by commercial banks and thrift institutions to business customers and individuals.

Reserve Banks

  • hold the cash reserves of depository institutions and make loans to them
  • move currency and coin into and out of circulation, and collect and process millions of checks each day
  • provide checking accounts for the Treasury, issue and redeem government securities, and act in other ways as fiscal agent for the U.S. government
  • supervise and examine commercial banks that are members of the Federal Reserve System for safety and soundness
  • participate in the activity that is the primary responsibility of the Federal Reserve System, the setting of monetary policy.
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