Complexities of the U.S. Financial System
Complexities of the U.S. Financial System
Vicki Cooley
Joseph Arbeiter
Principles of Finance
Joseph Arbeiter
Complexities of the U.S. Financial System
Vicki Cooley
“A financial market is a market in which individuals and businesses are given the opportunity trade financial securities, commodities, and other fungible items of value at low costs and at prices that reflect the current supply and demand. Securities include stocks and bonds. Commodities include precious metals or agricultural goods.”
There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded). Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one "place", thus making it easier for them to find each other.”
“The U.S. Federal Reserve plays the role of controlling inflation by managing credit, the largest component of the money supply. The Federal Reserve has the power to restrict credit by raising interest rates and making credit more expensive. This process reduces the money supply, which curbs inflation.”
“The Board of Governors, or Federal Reserve Board, is the controlling body of the U.S. Federal Reserve. The Federal Reserve Board, made up of 7 members appointed to staggered 14-year terms. The Board is allowed by both the executive and legislative branches of government to operate with a great deal of independence. The Board is in charge of overseeing the policies that regulate the commercial banking system and plays an important role in setting monetary policy. “The Board also regulates financial institutions rights to protect consumer credit through the Truth in Lending Act, Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and Truth in Savings Act.”
“The Board is responsible for supervising the activities of the 37 Federal Reserve Banks, as well. The 12 Federal Reserve District Banks have a fair degree of autonomy within their districts in terms of
Vicki Cooley
Joseph Arbeiter
Principles of Finance
Joseph Arbeiter
Complexities of the U.S. Financial System
Vicki Cooley
“A financial market is a market in which individuals and businesses are given the opportunity trade financial securities, commodities, and other fungible items of value at low costs and at prices that reflect the current supply and demand. Securities include stocks and bonds. Commodities include precious metals or agricultural goods.”
There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded). Markets work by placing many interested buyers and sellers, including households, firms, and government agencies, in one "place", thus making it easier for them to find each other.”
“The U.S. Federal Reserve plays the role of controlling inflation by managing credit, the largest component of the money supply. The Federal Reserve has the power to restrict credit by raising interest rates and making credit more expensive. This process reduces the money supply, which curbs inflation.”
“The Board of Governors, or Federal Reserve Board, is the controlling body of the U.S. Federal Reserve. The Federal Reserve Board, made up of 7 members appointed to staggered 14-year terms. The Board is allowed by both the executive and legislative branches of government to operate with a great deal of independence. The Board is in charge of overseeing the policies that regulate the commercial banking system and plays an important role in setting monetary policy. “The Board also regulates financial institutions rights to protect consumer credit through the Truth in Lending Act, Equal Credit Opportunity Act, Home Mortgage Disclosure Act, and Truth in Savings Act.”
“The Board is responsible for supervising the activities of the 37 Federal Reserve Banks, as well. The 12 Federal Reserve District Banks have a fair degree of autonomy within their districts in terms of
References: | Groz, Marc M. (2009): Forbes Guide to the Markets, John Wiley & Sons, Inc., New York | | Valdez, Steven An Introduction To Global Financial Markets, Macmillan Press Ltd. http://www.federalreservesystem.gov/boardmembers http://www.investopedia.com/articles/How Interest Rates Affect the U.S. Markets/(How Do Interest Rate Cuts Affect Consumers?/ (How Much Influence Does The Fed Have? http://www.sec.gov/investor/pubs/ininvest.htm