References
Game:
- vimeo.com
- http://www.stlouisfed.org/newsroom/press_kit/backgrounder.cfm
- http://memecrunch.com/generator/template/464976/spongebob-bill/
- http://en.wikipedia.org/wiki/Monetary_policy
Everyone needs to divide into 3 groups of 10-13 people per group.
and wait for more directions.
Now that you have a group, you need to sit with them & let your spokesperson sit in the very front.
Of those 10-13 people, you need to pick one to be your spokesperson.
The Federal Open Market Committee
Pick someone that's loud with quick reflexes!
- The Federal Open Market Committee (FOMC) makes important monetary policy decisions about interest rates and the growth of the U.S. money supply.
- Members for the FOMC are drawn from the Board of Governors and the 12 district banks. The president of the New York Federal Reserve Bank is a permanent member.
A Stronger Fed
- The Federal Reserve System that we have today was last modified in 1935. It was modified to respond to a crisis more efficiently.
- The new Fed helps the country as a whole to avoid depression, but also helps smaller towns avoid a major bank crisis.
The Federal Reserve in American History
Member Banks
- The Federal Reserve System, or the Fed, is the central bank of the United States. Its most important job is to act as a main advocate for the country's monetary policy.
- Monetary policy is the action taken by the Fed to influence the level of total production in just the United States (real GDP) and the rate of inflation in the economy.
- Fiscal policy (yesterday's section) and monetary policy are two very important tools used by the government to alter macroeconomic outcomes.
- Fiscal policy is either expansionary (increases total money supply in the economy more quickly), or it is contractionary (expands the money supply in the economy more slowly than normal) which is intended to slow inflation.
- All nationally chartered banks are required to join the Federal Reserve System. All the rest are state-chartered banks, and they join voluntarily.
- All banks have access to the services offered by the Fed, whether they're members or not. This includes reserve loans to banks in need of short-term cash.
- Fed member banks are required to contribute a small amount of money to join the system. The Fed receives stock in the system, which earns the bank dividends from the Fed at a rate of up to 6%.
- The Fed is owned by banks rather than the government, which helps give the independence needed to make the decisions that suit the country the best.
Continued Need for Reform
Banking History
- The Federal Reserve System was created for situations just like the Great Depression. However, when the depression hit, the system failed.
- It's up to the Fed to make sure we don't slip into another depression, and if they don't react fast enough, they could virtually put the country in deeper.
Structure of the Federal Reserve
Twelve Federal Reserve Banks
Federal Reserve Act of 1913
- The United States is divided into 12 Federal Reserve Districts, with one Federal Reserve Bank located in each one. Each bank is to report banking and economic conditions for their district.
- Each Reserve Bank has a board consisting of nine directors. The first three directors represent commercial banks. The next three represent the interests of groups like industry, commerce, labor, services, and consumers. The third group represents the same broad public interests as the second group, but are appointed by the Board of Governors, whereas the first two are appointed by their district's member banks.
The Board of Governors
Chapter 16 Section 1 pg. 419
- The Federal Reserve System is overseen by the Board of Governors of the Federal Reserve.
- The Board is compromised of 7 member appointed by the President, with the advise and consent of the Senate. They serve staggering 14-year terms to avoid one President appointing the whole committee.
- A chair is also appointed by the President, who chooses 1 of the 7 people on the Board. Many of these people have been economists, business people, academic scholars, or government officials.
Bell Work
(Use your book to answer the questions.)
1. What is the Federal Reserve System?
2. "FOMC" stands for what?
3. All nationally chartered banks are
required to join what?
Chapter 16 Section 1
The Federal Reserve System