ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Federal Reserve performs five key functions in the public interest to promote the health of the U.S. economy and the stability of the U.S. financial system.

Detailed explanation-2: -The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system.

Detailed explanation-3: -The Federal Reserve has supervisory and regulatory authority for all BHCs, regardless of whether subsidiary banks of the holding company are national banks, state “member” banks, or state “nonmember” banks (see a complete discussion of “State Member Banks” beginning on page 77).

Detailed explanation-4: -The Federal Open Market Committee sets U.S. monetary policy in accordance with its mandate from Congress: to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy.

Detailed explanation-5: -Today, the Fed is tasked with managing U.S. monetary policy, regulating bank holding companies and other member banks, and monitoring systemic risk in the financial system. The seven-member Board of Governors, the system’s seat of power, is based in Washington, DC, and currently led by Fed Chair Jerome Powell.