UGBA 10 Lecture Notes - Lecture 6: Federal Funds Rate, Electronic Funds Transfer, United States Treasury Security

• School: Berkeley
• Department: Business Administration Undergraduate Program
• Course: UGBA 10
• Professor: John Briginshaw

Document Summary

The fed is the central bank the united states. Heavily concentrated on east coast, only one on the west (sf) Percentage of its deposits that a bank must hold in cash or on deposit with the fed. Interest rate at which member banks can borrow money from the fed. Interest rate at which commercial banks lend reserves to each other, usually overnight. The fed"s sale and purchase of securities in the open market. Fed buys securities - money supply . Fed sells securities - money supply . Bond operations executed by the bureau of the fiscal service. Monetary policy: management of nation"s economic growth. Management of money supply and interest rates. Operates under more of a political consensus. Fed influences ability and willingness of banks to loan money. Create money to buy assets rather than using the cash that banks deposits under the reserve requirements. Buy a much wider range of securities in particular mortgage back securities (mbs)