Complexities of the U.S Financial System Essay

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Describe how the U.S. financial markets impact the economy, businesses, and individuals. The U.S financial markets impact the economy, businesses, and individuals by, helping to efficiently direct the flow of savings and investment in the economy in ways that facilitate the accumulation of capital and the production of goods and services. The combination of well-developed financial markets and institutions, as well as a diverse array of financial products and instruments, suits the needs of borrowers and lenders and therefore the overall economy. (Ronald W. MelIcher, 2011) Explain the role of the U.S. Federal Reserve, the Federal Reserve Chairman, and Board, indicating its effectiveness in today’s economic environment. The Role of the U.S Federal Reserve, the Chairman, and board is to save financial institutions that are too big to fail, and to employ unconventional facilities in lending to make sure the world economy does not fall. In order to understand this you have to remember why the Federal Reserve came into existence. (Bernanke, 2007) In the years between 1837 until 1913 the United States was without a central bank, when during this time banks abused their power and perform fraudulent banking practices. They often managed business poorly and were unregulated. The need for a central bank came after the banking panic of 1907, then President Wilson signed into law the Federal Reserve act of 1913. The goal of the Federal Reserve is creating economic stability and insuring banks have adequate capital for daily operations. In order to accomplish these goals the Fed supplied the economy with fiduciary currency: thus, to make sure clear transactions were made by customers and banks themselves. Act as a fiscal agent for the government, and supervise depository institutions, and regulate the economic and global money supply. (Ronald W. MelIcher, 2011) The role of
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