Marketing Essay Example | Topics and Well Written Essays - 750 words - 6

Marketing - Essay Example This paper will look at the Federal Reserve Bank’s organizational structure and its roles in governing monetary policy. The structure of the Federal Reserve Bank consists of Member banks, Reserve Banks, the Federal Open Market Committee, Board of Governors, and the congress and the President. Member Banks Member Banks refer to private banks, for example, Bank of America, which has the stock in any of the twelve local Reserve Banks. Every countrywide chattered bank must own stock in the Federal Reserve. In addition, state chartered banks or financial institutions may decide to own stock or not if they satisfy a number of conditions. The stock held by these banks cannot be traded or sold like ordinary stock and constituent banks get fixed amount of dividend every year on this stock (Arthur 417). Moreover, constituent banks have the dispensation of selecting a number of the officials in the board of their regional Reserve Banks. Reserve Banks   The operating arm of the Federal Reserve Bank is made up of twelve regional Reserve Banks. These regional Reserve Banks have the responsibility of regulating and supervising constituent banks. In addition, the regional Reserve Banks are charged with the responsibility of handing out coins and currency to affiliate banks (Arthur 418). Every Reserve Bank is made up of nine board of directors. ... The five individuals are New York’s Reserve Bank chairman and heads of any four Reserve Banks (Arthur 418). Officials from Reserve Banks operate on a rotary process, and only the official from the Reserve Bank of New York serves on a permanent basis. Board of Governors   The Board of Governors constitutes seven officials who are picked by the American President and approved by the American Senate. The Board of Governors also comprises a chairperson and a vice chairperson. Every official in the Board of Governors holds his position for up to fourteen years. Also, these officials cannot be reappointed after the expiry of their terms. The fourteen year term serves as a precaution for the Federal Reserve Bank to conduct its functions without any political interference (Arthur 419). The president picks two officials from the board, one of the officials become the Chairperson and the other becomes the vice chairperson. The two ranks last for four year duration. US Congress and the President   The president makes appointments and the Senate approve the Board of Governors members. Nevertheless, the Federal Reserve Bank functions on its finances. This safeguards it from the influence of the administration during the making of the budget every year. Congress can hold the Federal Reserve Bank accountable for its activities. In addition, Congress can control both the Federal Reserve Bank’s responsibilities and activities by law (Arthur 420). This means Congress can change the activities of the Federal Reserve Banks by enforcing new laws. The Federal Reserve Bank also has roles associated with governing monetary policy. The Board of Governors has the responsibility of establishing