1. What is a central bank and why do we need one?
2. What legislation created the Federal Reserve? Why did Congress finally create it?
3. What is the FED’s primary duty?
4. How are the FED’s operations financed?

Think of the Federal Reserve System as a pyramid with three components.

1. The Board of Governors is at the APEX of the pyramid. Who appoints them? Who confirms the appointments? For how long? How are the terms arranged? Why did Congress do it this way?
2. Who designates the Chair and the Vice Chair? For how long is each appointed?
3. At the MIDDLE of the pyramid are the District Banks. How many are there? What is the function of the District Directors?
4. At the BASE of the pyramid are the member financial institutions. How does one become a member?
5. What services does the FED provide the financial system?
6. What three policy tools does the FED use to guide monetary policy? Briefly describe each.
7. Who or what sets the discount rate?
8. What is the FOMC? How many voting members are there?

1. Why did the Federal Reserve begin to use unconventional monetary policy tools in 2007?
2. Why has the Federal Reserve stopped using these tools?
3. What were FIVE of the unconventional strategies to stimulate the economy? What was the purpose of each?

http://www.federalreserve.gov/releases/h6/Current/

SCROLL down to the footnotes.

1. What are the components of M1?
2. Find the two most recent numerical values of M1 NOT SEASONALLY ADJUSTED. Has M1 increased or decreased? What is its most recent value?
3. What are the components of M2?
4. Find the two most recent numerical values of M2 NOT SEASONALLY ADJUSTED. Has M2 increased or decreased? What is its most recent value?
5. Based on your findings, what is your opinion of the Federal Reserve’s monetary policy? Is it easy money (BOTH M1 and M2 increased) or tight money (BOTH M1 and M2 decreased) or someething else?

Give the name of the federal banking leglislation which did the following:

1. Established the FDIC
2. Designed to improve the accuracy and transparency of the national credit reporting system and preventing identity theft and assisting victims of it
3. Repealed the last vestiges of Glass Steagall Act (note: and helped to lead to the financial collapse in 2007!)
4. Established the Federal Reserve System as the central banking system of the U.S.
5. Requires that CEOs and CFOs of corporations certify the annual and quarterly reports of publicly traded companies
6. Forced financial institutions to stop their practice of “reverse redlining”
7. Established “NOW Accounts”, allowed financial institutions to pay interest on checking accounts for the first time, and began the phase-out of interest rate ceilings on savings deposits.

Go to the Learning Bank
http://www.fdic.gov/about/learn/learning/Index.html

1. What is the purpose of the FDIC?
2. Why was the FDIC created?

Go to the Press Releases
http://www.fdic.gov/news/news/press/2008/pr08093.html

1.  10. What legislation increased deposit insurance from $100,000 to $250,000?

2.   11. Sheila Bair was Chair of the FDIC when deposit insurance was increased. Who 
3.   is  the current Chair of the FDIC?

CLICK on About NCUA

1. What is a credit union?
2. What is the function of the NCUA?
3. What is the name of the insurance fund which insures depositors at a credit union?

1. What is a national bank?
2. What is the function of the OCC?
3. Does its funding to operate come from the federal government? Explain.

1. What is WaMu?
2. What did “Getting the Job Done” mean for employees at WaMu?
3. When and where was WaMu founded?
4. What was “The Power of Yes” campaign? How did it effect employees at WaMu?
5. What are “option ARMS”? Why were they particularly attractive to managers at WaMu?
6. How did referral fees to real estate agents help business at WaMu?
7. What has happened to WaMu banking operations?

1. What is the official “uncollateralized overnight call rate” (which is like our federal funds rate) in Japan?

Visit the Federal Reserve FOMC
http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm

SCROLL down the page. CLICK on the most recent STATEMENT.

1. What is the current view of the FOMC of the economy?

Visit The Federal Reserve’s Table H-15 for a listing of current interest rates:
http://www.federalreserve.gov/releases/h15/current/

1. What is the value of the official discount rate in the United States?
2. What is the value of the federal funds rate in the United States?
3. In general, in the Unite States what is meant by the “federal funds rate” and how does this interest rate differ from the “discount rate”?
4. Compare these official bank lending rates for these two countries. Why do you think they are different?