ECO 301 Lecture Notes - Lecture 10: Open Market Operation, European Central Bank, Federal Reserve Act
24 Oct 2016
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Chapter 16: central banks and the federal reserve system. The federal reserve system has a very different structure compared to other central banks due to: resistance to establishment of a central bank. As result the first bank of the united states (1791) whose aim was to supervise the banking system was disbanded in 1811. The second bank of the united states (1871) became private in 1836 and was liquidated in 1841. Federal reserve act of 1913: elaborate system of checks and balances, decentralized. Writers of the federal reserve act wanted to diffuse power: along regional lines, between the private sector and the government, among bankers, business people, and the public. Each district has its own federal reserve bank. It"s a (cid:395)uasi-public institution owned by private commercial banks in the district that are members of the fed system and purchase its stocks. Member banks elect 6 directors for each district;3 more are appointed by the board of.
