The Federal Reserve

The Federal ReserveThe Central Bank of the United States

The Federal Reserve

Main job: to regulate or “control” the size of the supply of money,

the total amount of money in circulation

http://www.youtube.com/watch?v=rUzrMfDKI-E(2:30 into the clip see making of money)

Q: Who is the current Chairman of the Federal

Reserve?

Oh! Oh! That’s me! Ben

Bernanke!

http://video.aol.com/video-detail/cnbccom-fed-chairman-ben-bernanke-testimony/3007286962(testifying before House committee) (16:27)

http://video.aol.com/video-detail/ben-bernanke-holds-qandampa-session/3681234450 (good Q & A session) (20:44)

http://www.youtube.com/watch?v=usiFU3FEv9w(Ron Paul confronts Bernanke) (3:32)

How & Why is the Fed independent?

• Congress wanted Fed to make best decisions possible, even if contrary to public opinion

• Governors serve for year term

• Funding: no money from Congress; operating expenses paid from interest on the assets it holds

I’m indepen-

dent

Federal Reserve Structure

Meets 8 times a year to vote on Monetary Policy

Federal Reserve

Board of Governors

(7 members)

Ben BernankeChairman

Federal Open Market Committee= 7 Governors + 5 District Bank Presidents—meets 8 timesper year

12 District FederalReserve Banks

BostonSan FranciscoNew YorkAtlantaChicagoDallas, etc.

Member Banks

All national banks

Some state banks

Federal Funds Rate = Interest ratethat the 12 District banks charge Each other on overnight loans

Discount Rate=Interest rate that the Fed lends money directly to District Banks

(rarely used) SF Fed Building—Market Street

Hi! Remember me, Ben

Bernanke!

Now that you know what our Chairman looks like, it’s time to play a short round

of…

Can YOU Spot Him?

Great Job!

There he is!

BEN BERNANKE?

Ben Bernanke is too busy dealing with the economic crisis; he doesn’t have time to go to the carnival!

Video

Ben Bernanke Interview on 60 Minutes 3/22/09

--during the segment write down three observations, opinions and/or interesting facts learned

http://www.cbsnews.com/stories/2009/03/12/60minutes/main4862191.shtml60 Minutes—Ben Bernanke Interview Part I (13:24)60 Minutes—Ben Bernanke Interview Part II (13:14)