ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -All state and national banks are required to join the Federal Reserve System. Banks are prohibited from lending all of the money they receive from customers. The most way for a bank to be organized is as a mutual savings bank.

Detailed explanation-2: -Federal Reserve Membership More than one-third of U.S. commercial banks are members of the Federal Reserve System. National banks must be members; state chartered banks may join by meeting certain requirements.

Detailed explanation-3: -National banks must be members of the Federal Reserve System; however, they are regulated by the Office of the Comptroller of the Currency (OCC). The Federal Reserve supervises and regulates many large banking institutions because it is the federal regulator for bank holding companies (BHCs).

Detailed explanation-4: -Which of the following is true of the Federal Reserve System? It is the central bank of the United States, It is responsible for setting monetary policy, It is responsible for regulating the banking system. (All of the choices are correct.)

Detailed explanation-5: -Nonmember banks are financial institutions that are not members of the Federal Reserve System. They can be community banks, credit unions, or industrial banks. National banks are required to join the Fed, while state banks can join if they meet certain requirements.