This course and the previous course of macroeconomics have helped me to have a much better understanding of how our economy is affected by the government. To be perfectly honest, I thought these courses were going to be boring but to my surprise I usually found the subjects interesting and useful. One subject I found interesting and relates closely to my employment in the mortgage banking business is the Federal Reserve System.
The Federal Reserve has many functions. It serves as the nation’s money manager, provides financial services for the U.S. Department of Treasury, serves as a clearing house for checks and electronic payments, manages the nation’s money supply, provides supervision and regulation of the nation’s banking and financial system, and oversees banking and finance-related consumer protections laws.
The issuance, transfer and redemption Treasury securities are also handled by the Fed. Food stamps are also processed and redeemed by the Federal Reserve.
The Federal Reserve also processes and clears payments made by checks or electronically thru banks. When the checks or electronic fund transfers are processed, funds from the bank of origin are transferred to the bank of deposit.
The Fed serves as lender to depositary institutions that are subject to the required reserve requirement. It assists with temporary credit problems. Loans usually range from overnight to a two week time period. Longer-term loans are also available but not used on a normal basis. These loans are obtained using the discount rate.
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