...Institutions: You Can Bank On It Michael Ricks When I first took a look at this assignment I thought it would be easier than it this. I looked for days on the internet trying to find banks or depositories with credit cards with variable interest rates. What I found was many banks with many credits all with annual percentage rates (APR). So to keep my insanity I just looked at three commercial banks. I looked at Bank of America, US Bank, and Regions bank. I looked at all their credit cards student, business, rewards, and secured. Bank of America credit cards Apr varied anywhere from 12.99% to 20.99%. Here is how they get people, 0% introductory APR for the first 12 billing cycles only for purchases. When that cycle ends your rate will depend on your creditworthiness. US Bank does similar and their rates are from 11.99% to 23.99%. Regions is in the same neighborhood starting at 13.99%, 16.99%, or 19.99% based on credit, but can quickly climb to 24.99% or even 29.99%. Every bank I researched, including credit unions, all based the rate that you would receive on your creditworthiness when you open your account. After that, your APR will vary with the market based on the Prime Rate as set out in the Variable-Rate information section of your agreement. The current annual percentage rate (APR) for a new car can vary from bank to bank, amount to amount, and year to year. It is not something that is set in stone. I looked at PNC bank, US Bank, and St. Louis Community...
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...September. Both index increases infer growing confidence and positive expectation in current policy. These data will translate to more spending in the aggregate leading to more employment with the probability of increased productivity to supply the demand for goods and services. Consumer Income The US Department of Commerce Bureau of Economic Analysis (BEA) reports personal income increased 0.2 percent for the month of September 2014, and disposable income rising 0.1 percent during the same period. Of note, personal expenditures dropped 0.2 percent equaling this increase. Tis effectively negates any positive contribution to aggregate demand, and in fact, has potential to create an over-supply of goods and services. Interest Rates The Federal Reserve reports no significant changes in key interest rates during the past three months. The...
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...would be a valuable source because it contains a large amount of information in one location. There are several divisions that collaborate to complete an accurate economic forecast which include. These divisions include national, international, regional, industry, and integrate accounts, all of which include national income and product accounts, and the gross domestic product to name a couple (U.S. Bureau of Economic Analysis 2013). Current Data Resource A possible resource for current information can include the Federal Reserve Economic Data (FRED). FRED is an online database that includes economic data from several different srouces. FRED was developed by the research department at the Federal Reserve Bank of St. Louis. The database combines data with other tools to help the user understand, interact, and display data. This can be a valuable resource because it allows the used to gain information but also to be able to create “data stories” (Federal Reserve Bank of St.Louis, n.d.). Conclusion Many resources exist for finding...
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...FEDERAL RESERVE • In 1913 the Federal Reserve Act was passed, establishing reserve requirements for those commercial banks that chose to become members. • There are 12 Districts across America • It earns most of its income in the form of interest on its holding on US. Government securities as well as providing services to financial institutions. • The income earned is transferred to the Treasury • It regulates commercial banks and conducts monetary policy, adjusting the money supply to achieve full employment and price stability ( low inflation) • Has five major components o Federal Reserve District Banks o Member Banks o Board of Governors o Federal Open Market Committee o Advisory Committees Federal Reserve District Banks • Federal Reserve District Cities: o 1. Boston, Massachusetts o 2. New York, New York (Most important District City) o 3. Philadelphia. Pennsylvania o 4. Cleveland, Ohio o 5. Richmond, Virginia o 6. Atlanta, Georgia o 7. Chicago, Illinois o 8.St. Louis, Missouri o 9. Minneapolis, Minnesota o 10. Kansas City, Kansas o 11. Dallas, Texas o 12. San Francisco, California • Commercial banks that become members must purchase stock in the FED • Each District has 9 members o 6 are elected by member banks in which 3 are professional bankers and 3 are engaged in business o The remaining 3 are appointed by the Board of Governors o All nine directors appoint their Fed district bank president • District banks facilitate...
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...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
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...Washington Federal Savings University of Phoenix Business Law BUS 415 Deborah Gronet October 20, 2007 Washington Federal Savings Washington Federal Savings is a financial institution that has served communities statewide since 1917. As a savings and loan institution, Washington Federal offers checking and savings accounts and mortgage loans. Defining itself amongst competitors, Washington Federal provides customers with the “human touch” in its simplest form - quality customer service. Operating in eight states, Washington Federal maintains a relatively small staff of 885 employees. As a financial institution, Washington Federal is highly regulated by certain federal agency regulations. This paper will explore the regulations currently in effect for financial institutions, as well as the origin, evolution, and efficacy of these regulations within Washington Federal Savings. Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation [FDIC] is an independent agency of the United States government. The FDIC protects depositors against the loss of deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the credit of the United States government. An insured bank is any bank or savings association with FDIC insurance (Federal Deposit Insurance Corporation [FDIC], 2007). The FDIC was created in 1933 by the Glass-Steagall Act. This was a merging of two separate acts which were created by the U.S. government...
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...Finance FIN-3005 June 3, 2014 Questions and Applications 7) Borrowing from the Federal Reserve: Describe the process of “borrowing at the Federal Reserve.” What rate is charged, and who sets it? Why do banks commonly borrow in the federal funds market rather than through the Federal Reserve? “Borrowing at the discount window” represents the borrowing by depository institutions from the Federal Reserve. The interest rate charged on these loans is known as the discount rate is set by the FED. Banks tend to prefer the federal funds market over the discount window because the Fed may monitory the bank’s reasons for borrowing. The Fed’s discount window is intended to accommodate banks that experience “unanticipated” shortage of funds. 9) Bullet Loan: Explain the advantage of a bullet loan. A bullet loan is a loan that specifies a date in the future in which the principal is paid off in a lump sum. This type of loan is useful for a borrower will have limited funds in the near future. 10) Bank Use of Funds Why do banks invest in securities even though loans typically generate a higher return? Explain how a bank decides the appropriate percentage of funds that should be allocated to each type of asset. Securities provide a bank with liquidity, because they can often be sold easily in the secondary market. In addition, many securities purchased by banks have low risk. Therefore, the securities can be used to minimize liquidity risk and default risk...
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...Kwajelin This week in week three we touched basis on the banks and money and what they parts the play to us in society. As for me this week was not as confusing as weeks one and two was. I say this probably because I was able to sit down and look at the assignments and think about them ahead of time. Talking about the Fed’s increase rates and the Fed’s decrease rates I wanted to engage in more of my interest because, it can be related to the stimulus plan that the government is discussing now. The stimulus plan is to help the economy in rebuilding the economy by helping with control spending within the government and lowering the taxes. I had a struggle with at first the two Fed net selling and Fed net buying. I had never heard of them before so it more interesting and a struggle to see how I could apply them to my personal life. As for week three it was interesting and ready to blast into week four. Brigett This week we covered some very important and complex topics. We started off by defining the uses of money and the ways that money is created by banks. We looked at the monetary policies; how they work, what they affect, and how they are affected by different actions. We discussed the roles of the Federal Bank, the reserves, and the fed funds rates. The most interesting topic for me was the increasing and decreasing of interest rates and how such as simple act can affect our economy, and ultimately, our decisions as consumers. I cannot honestly say how these topics will...
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...the funds in their account to cover the check so it does not get a stamp of “Non-Sufficient Funds.” Before the break out of the Civil War, banknotes and bills of exchange were used extensively; they remained competitive with the deposit accounts. Once the war broke out, congress passed legislation that was known as the National Banking Act. These were the two acts that established the banking system in the United States as we know, and they were the National Banking Acts of 1863 (originally known as the National Currency Act) and the National Banking Act of 1864, this new act was in acted to take the banking system out of the hands of the state government. “These acts encouraged the development of the national currency backed by the bank holdings of the U.S. Treasury securities and established the Office of the Comptroller of currency as part of the United States.” (Wikipedia, the free encyclopedia) As the United States was still young, the banking system was also and...
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...responsible for the Financial Crisis? Everyone who tries to answer this question just points fingers, and the ones who are being pointed to, react by saying: “Hey, it wasn’t me or my company, I trusted the system,” or “I relied on somebody else’s judgment.” Some people blame the consumers for spending too much; some blame the banks for their lending practices, while others blame the credit agencies for their vague ratings. But by now, we are completely sure of one thing; the housing bubble was one factor that generated this financial crisis. So, who is to be blame for creating the housing bubble? According to John Taylor’s article, “How Government Created the Financial Crisis,” lax policies implemented by the Federal Reserve (Fed) caused the financial crisis. As a response to John Taylor’s opinion, Alan Greenspan’s article, “The Fed Didn’t Cause the Housing Bubble”, defends the Fed’s policies and places the fault on mortgage rates, such as long-term or fixed mortgages, as the real cause that triggered the Housing bubble. Even though John Taylor’s, a professor of Economics at Stanford, and Alan Greenspan’s, a former chairman of the Federal reserve, opinions are strongly supported by facts, I’m truly fed up of hearing excuses and finger pointing about the current financial crisis. The fact is that both the Fed’s policies and the rates on mortgages initiated the housing bubble, and I can’t reject either explanation. However I believe that it is time to start thinking about...
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...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
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...are. The financial market affects all individuals in many ways that we may not even realize. “Many believe that if you don't invest in the stock market, a stock market crash doesn't affect you. However, any average person loses money and opportunities all based off the stock market”.( How does the Stock Market Affect You?, 2011.). When the stock market begins to fall, employers start cutting back on employee benefits. These benefits can include health insurance and retirement plans. Another area where individuals are affected is n the housing market. A bad economy can make it extremely hard for individuals to sell their homes. If a homeowner cannot pay the difference between the price of the home and the amount that they currently owe the bank, the home cannot be sold. These sums are generally over $10,000.00. Purchasing a home also gets very...
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...fedrThe Federal Reserve Policy from 1999 to the Present: The monetary policy of the United States has two basic goals that are outlined in a 1977 amendment to the Federal Reserve Act. These basic goals are: to promote "maximum" sustainable output and employment while promoting "stable" pricing [1]. It has become the responsibility of the Federal Reserve Board to try in: Maintaining the stability of financial systems and contain risk that may arise in financial markets. Regulating banking to ensure safety and soundness protecting the consumer from harm while using credit and banking services. Overseeing the nation's payment systems providing financial services to financial institutions, the U.S. government, and foreign institutions. Stabilizing world pricing and creation sustainable employment. While the Federal Reserve Board is in a constant challenge to perform these above tasks. The economy goes through business cycles where the output of goods and services and the employment rate of the country are above or below their long running levels. The term "monetary policy" refers to what the nation's central bank or Federal Reserve happens to administer so that they may influence the amount of money and credit in the U.S. economy. What happens to this money or the credit during this time will directly affect the interest rates and the performance of the U.S. economy and its people. Stabilizing the U.S. economy has become paramount for the Federal Open Market...
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...The Multiplier Effect Kasie Collins Macroeconomics | ECO201 A02 December 4, 2013 Abstract: This paper measures the effects on the primary U.S. mortgage market. This paper will discuss the Federal Reserve purchasing $1.25 trillion of mortgage backed securities in 2009 and also in 2010. We use an event-study approach and measure the movements in both prices and quantities around the initial announcement of the LSAP and subsequent changes to the program. This paper will show that the LSAP program led to a substantial boost in market activity, with discontinuous increases in searches, applications, and originations for refinance mortgages but not for purchase mortgages. Finally, this paper will show that more creditworthy borrowers were significantly more likely to benefit from the improved credit availability. Introduction The Federal Open Market Committee (FOMC announced a plan for the Federal Reserve Bank of New York. On November 25, 2008, the FOMC announced that the Federal Reserve Bank of New York would purchase $500 billion dollars of mortgage-backed securities (MBS). This was issued by the two main government-sponsored entities (GSEs) for housing, Fannie Mae and Freddie Mac, as well as ones guaranteed by the government agency Ginnie Mae. The purpose of large-scale asset purchase (LSAP) program was to reduce the spread between mortgage interest rates and other interest rates of similar duration. This action is being taken to reduce the cost and increase the availability...
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...Bureaucracy and you October 23, 2011 POS/110 Mary Ann Koehler Axia College The federal bureaucracy is the United States (U.S.) largest employer. They have millions of employees that literally help run the country we all know as home. Their jobs range from postal services, public broadcasting, and to being in control of student loans. The federal bureaucracy plays such a significant role in our everyday lives that sometimes we do not even realize it. My essay will explain five ways in which the federal bureaucracy regulates my everyday life. I will explain the five agencies that are associated with these regulations and give an in depth explanation of the agencies specific job description and how they affect my life. The federal bureaucracy affects my life more than I knew. I was very surprised to learn that almost every move I make and every think I do on a daily basis is based on the federal regulations. My fiancé is in the process of starting his own business so one of my first errands I or we have to run almost every day is to the bank. The bank that I use is run by the Federal Reserve Board (FRB). When I am home I wait for the mail to come because clients send receipts for invoices they receive and I have to keep track of all of them to ensure our books are straight and that all payments have been made. This goes for our monthly bills we get in the mail as well. The United States Postal Service is in charge...
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