Complexities of the U.S. Financial System

Complexities of the U.S. Financial System

Assignment1:
Complexities of the U.S. Financial System

Synthia Reed
FIN 100
Professor Lester Reid
Strayer University

May 5, 2013

Complexities of the U.S. Financial System
The U.S. financial markets play a big role in the economy. If no one is investing in businesses, they cannot start up, or grow larger to meet the needs of the country or nation. The economy is directly impacted by the amount of stocks bought and sold each day. Before the U.S. stock market crashed in 1929, it was booming. Americans had invested so much money in France that when their economy rose, so did the U.S. It collapsed because Americans pulled their money out of France and put it in U.S. stocks. If everyone pulled their investments today, the same thing would happen. Businesses would fail, and the U.S. would go into more debt.
The central bank of the United States is the Federal Reserve System controls the financial system, and is the most powerful single actor in the U.S. economy. The head of the central banking system of the U.S. is called the Chairman of the Federal Reserve. The chairman is appointed by the president of the United States and serves a four-year term with confirmation from the Senate, currently serving is Ben Bernanke. The Federal Reserve System has a total of seven board members including the Chairman.   With the exception of the Chairman members serve a staggered fourteen-year term. The Federal Reserve Board of Governors is responsible for the monetary policy and serves as a dependent political structure.   Although it is a dependent political structure and operates on its own, disagreements between the administration and board are very common. Pressure from Congress and/or the President can and have influenced the decision of the board but its semi-independence prevails, generally.   The Federal Reserve Board of Governors “operates through the Federal Open Market Committee to control the money supply as a means of meeting monetary policy objectives”....

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