The United States Federal Reserve System consists of the Central Management Committee in Washington, D.C. and 65,438+02 regional Federal Reserve banks in major cities of China. Bernanke is the current chairman of the Federal Reserve Management Committee.
history
The first bank of America and the second bank of America were the earliest institutions with the function of central bank, which were approved on 179 1 respectively. During the "free banking era" from 1837 to 1862, there was no formal central bank in the United States, but from 1862 to 19 13, a (private) national banking system played this role.
The Federal Reserve was established by the United States Congress on the basis of the passage of the Irving-Glass Act (also known as the Federal Reserve Act), and was signed by President Woodrow Wilson on 19 13 12.23.
Roles and responsibilities
The main tasks of the Federal Reserve are:
Manage and standardize the banking industry
Implement monetary policy by buying and selling US Treasury bonds.
Maintain a strong payment system
The Federal Reserve cannot issue US Treasury bonds.
Other tasks include:
Economic education
Social transcendence
economic research
Organizational composition
The headquarters of the Federal Reserve is in the Axe Building. The Federal Reserve includes a management committee. The seven members of this committee are appointed by the President of the United States and approved by Congress. The term of office of members is 14, and they cannot be re-elected. A member may replace another member for the remainder of his term after the end of his term. The Federal Open Market Committee consists of seven members and five representatives of the Federal Reserve Bank. Representatives from the second district of new york are permanent members, while other bank members are limited to two or three years. The current members of the Federal Reserve Management Committee are:
Ben Bernanke, Chairman
Vice Chairman Roger Ferguson Jr.
Susan Schmidt Bis
Mark Olson
Donald cohen
interest rate
In the past 50 years, the Federal Reserve basically manipulated the federal funds rate, that is, overnight rate, through open market operations to implement monetary policy. This is an interest rate that banks pay each other interest on overnight loans. It alternately affects the minimum lending rate, which is usually 3 percentage points higher than the federal funds rate. The minimum loan interest rate is the interest rate at which banks provide loans to their best customers.
Low interest rates stimulate economic activities by reducing borrowing costs, making it easier for customers and enterprises to buy and build. High interest rates slow down economic development by increasing borrowing costs. (See monetary policy for details)
The Fed usually adjusts the federal funds rate by 0.25 or 0.50 percentage points at a time. From the beginning of 200 1 to the middle of 2003, the Federal Reserve lowered the interest rate 13 times, from 6.25% to 1.00% to cope with the economic recession. In June 2002, the interest rate dropped to 1.75, many of which were lower than the inflation rate. On June 25th, 2003, the federal funds rate dropped to 65,438+0.00%, the lowest level since 65,438+0.958. The average rate in overnight rate at that time was 0.68%. From the end of June, 2004, the Federal Reserve began to raise the target interest rate to cope with the possible inflation caused by an overactive economy. For example, from June 5438 to February 2004, the interest rate reached 2.25% after a series of small increases.
Federal Reserve Bank ［US］
12 Federal Reserve Bank in the Federal Reserve Area, as the operating force of the national central banking system, is more like a private company, which may confuse the concept of "ownership". For example, the Reserve Bank issues shares to member banks. However, owning shares in a reserve bank is completely different from owning shares in a private company. The reserve bank is not for profit, and owning a certain number of shares according to law is a necessary condition to become a member of its system. Shares cannot be sold, traded or used as collateral for loans; According to the law, the annual dividend is controlled within 6%.
Dividends paid to member banks are regarded as partial compensation for unpaid interest on the statutory reserves of member banks held by the Federal Reserve. According to the law, American banks must keep a certain amount of reserves, most of which are kept in the accounts of the Federal Reserve. The Fed does not pay interest to these funds.
The Federal Reserve 19 13 was established according to the Federal Reserve Act, which "established a new central banking system to increase the flexibility and strength of the national financial system". This legislation provides a system including 12 regional reserve banks and 7 member management committees. All national banks must join the system, and other banks can also join. The Reserve Bank19141kloc-0/10 started its business in October. Congress makes Federal Reserve paper money and provides flexible money to the whole country. Paper money is issued to the reserve bank and then sent to other banking institutions, which is consistent with social needs.
Who owns the Federal Reserve?
The Federal Reserve claims that no one owns it-it is an independent entity within the government department. The Federal Reserve is governed by laws covering federal agencies rather than private companies, including the Freedom of Information Act and the Privacy Act. At the same time, Congress gives the Fed autonomy to ensure that it can perform its duties independently of political pressure. The three parts of the Federal Reserve-the Management Committee, the regional reserve banks and the Federal Open Market Committee-all operate independently of the federal government and perform their core functions. Once a member of the Committee is appointed, he or she can be as independent as a Supreme Court judge, albeit for a short term.
Government influence
As the central bank of the United States, the Federal Reserve obtains power from the United States Congress. It is regarded as an independent central bank, because its resolutions do not need to be approved by the President of the United States or any senior legislature, it does not accept funds from the Congress of the United States, and its members' terms of office span many presidents and congresses. Its huge profitability ensures its financial independence, mainly because it owns government bonds. It returns billions of yuan to the government every year. Of course, the Fed is supervised by the US Congress, which regularly observes its activities and changes its functions through decrees. At the same time, the Fed must work within the overall framework of economic and financial policies formulated by the government.
Currency issuance and partial reserve banking system
Currency distribution: regulating the currency distribution in the economy through commercial banks and central banks.
Partial reserve banking system: a common banking practice, that is, banks only keep a part of their deposits to meet expenses, and lend the rest to obtain interest income to pay depositors' interest, and make bank owners earn income.
criticize
The general criticism of the Federal Reserve includes the criticism of the central banking system itself, such as the monopoly of its alliance operation in the banking industry and the issuance of currency. Specific criticisms include illegal profits and inflation.
From 1934 to 1948, marriner eccles was regarded as the highest scoring chairman of the Federal Reserve before Greenspan. He helped Roosevelt lead the American people through the Great Depression and presided over the formulation of the American Banking Act, which revived the confidence of the American banking system and strengthened the power of the Federal Reserve to formulate and implement monetary policy. Some people have commented that Ikos's greatest contribution lies in its efforts to lead the Federal Reserve independently of the government and the Ministry of Finance.
Thomas mccabe from 1948 to 195 1 year. Appointed by President Truman.
Arthur burns, from 1970 to 1978.
. He is Greenspan's academic tutor. He was the chairman of President Eisenhower's Council of Economic Advisers, the economic adviser of President Nixon, the chairman of the Federal Reserve from 1970 to 1978, and later the American ambassador to the Federal Republic of Germany.
G. william miller, 1978- 1979.
Paul Volcker, 1979 to 1987. Former Chairman of the Board of Directors of the Federal Reserve, Chairman of the Board of Directors of the Group of Thirty and Chairman of the Board of Directors of the International Accounting Standards Committee; Wolfensohn &; Former president of the company, professor of international economics at Princeton University.
Professor Volcker has worked for a long time in the US Federal Reserve system, and has served in the Board of Directors of the Federal Reserve in New York State, Chase Bank and the US Treasury Department. He has extensive influence in the economic field of the United States and even the world. He is a true American hero. Greenspan praised him as "the father of American economic vitality in the past two decades"
Alan greenspan, from 1987 to 2006. 1926 was born in new york on March 6th. 1948 got a bachelor's degree in economics from new york university, 1950 got a master's degree in economics, and 1977 got a doctorate in economics. From 1954 to 1974, from 1977 to 1987, he successively served as the chairman and president of new york Industrial Consulting Company (Thomson-Greenspan Company). From 65438 to 0970, he served as an adviser to the President's Council of Economic Advisers, and from 65438 to 0974, he served as chairman. After 1977, he served as an adviser to the Congressional Budget Office and a director of General Cable Company, Morgan Company, General Food Company, Mohsen Trust Company and Pegasus Company. 198 1 year as a member of the president's Council of Economic Advisers. 198 1 to 1983 chairman of the national social insurance reform commission. 1982 member of the president's foreign intelligence advisory Committee.
1987 was appointed chairman of the board of directors of the Federal Reserve by President Reagan in August. 1991July, President Bush appointed Greenspan to continue to serve as the chairman of the Federal Reserve Board. 1996 In February, President Clinton nominated him for re-election as chairman of the Federal Reserve Board of Directors, and on June 20th, the Senate overwhelmingly approved the nomination. Greenspan is also the chairman of the Federal Open Market Committee. On June 4, 2000, President Clinton re-appointed him as the chairman of the Federal Reserve, and on June 20 of the same year, he took up this position for the fourth time.
1In July 1998, Greenspan was awarded the American Peacemaker Award. In August 2002, the Queen of England awarded Greenspan the honorary title of "Jazz" in recognition of his "outstanding contribution to global economic stability".
Ben Bernanke (1953 12 13-), an American economist, is currently the chairman of the Federal Reserve. Born in Augusta, Georgia, USA, 1979 received a doctorate in economics from Massachusetts Institute of Technology. Bernanke has the title of prodigy, and got a score of 1590 in the college entrance examination, only a perfect score of 10, and was admitted to Harvard University.
Bernanke taught at Princeton University 17 and was the head of the Department of Economics. In 2002, he was appointed as a director of the Federal Reserve by George H.W. Bush. In June 2005, he served as chairman of the President's Council of Economic Advisers. In 65438 10, he was appointed as the next chairman of the Federal Reserve, replacing Greenspan.
Bernanke is a famous macroeconomist, whose main research direction is monetary policy and macroeconomic history. He is a member of the American Academy of Arts and Sciences and a researcher in econometrics. He has edited textbooks such as Principles of Macroeconomics and Principles of Microeconomics.