eco 315

They hold reserves.

Many people are reisitant to a centralized bank.. Fear of centralized power and moneyed interests

First 2 banks terminated in 1811 and 1836

after 1836 many bank panics occured - The federal act of 1913= creats decentralized system that was more politically accceptable

• a. The 12 federal reserve banks
• b. private commercial member banks
• c. The board of govenors
• d.The federal open market commitee

* all banks with national charter must be Fed member; banks with charters have the option of joining..

owned by private commercial banks in each distrist: those commercial banks buy stock in their district bank but they have very litle control unltimately...

MEMBER BANKS OWN FED

Each of the regional FED banks has 9 directors who apoint the president of the bank..

• Three directors are professional bankers chosen member banks...
• Three directors are prominent leaders of the industry, labor and agriculture.. chosen by memer banks..
• Three directors are appointed by BoG are not allowed to be officers, employees or stockholders of banks