Federal Reserve System - FRS

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DEFINITION of 'Federal Reserve System - FRS'

The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States.

INVESTOPEDIA EXPLAINS 'Federal Reserve System - FRS'

You can divide the Federal Reserve's duties into four general areas:

1. Conducting monetary policy
2. Regulating banking institutions and protecting the credit rights of consumers
3. Maintaining the stability of the financial system
4. Providing financial services to the U.S. government

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RELATED FAQS
  1. Who determines the reserve ratio?

    The Federal Reserve of the United States of America is the regulatory entity that determines the reserve ratio, and therefore ... Read Full Answer >>
  2. What's the lowest year-over-year inflation rate in the history of the U.S.?

    Lowest inflation may refer to years with the greatest deflation or the lowest amount of inflation above or equal to 0%. There ... Read Full Answer >>
  3. When has the United States run its largest trade deficits?

    In macroeconomics, balance of trade is one of the leading economic metrics that determines the trading relationship of a ... Read Full Answer >>
  4. How does the bond market react to changes in the Federal Funds Rate?

    The bond market is highly sensitive to changes in the federal funds rate. When the Federal Reserve increases the federal ... Read Full Answer >>
  5. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
  6. Why do commercial banks borrow from the Federal Reserve?

    Commercial banks borrow from the Federal Reserve primarily to meet reserve requirements when their cash on hand is low before ... Read Full Answer >>
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