If the Federal Reserve Bank is a private institution, how does it benefit the public?

Sounds like a quick econ 101 lesson is needed....

- The Federal Reserve System is a congressionally-chartered agency like the USPS and NASA. It is organized with a 100% government agency at the top (the Board of Governors), and branches beneath them that resemble corporations. (http://www.federalreserveeducation.org/fed101/stru... )

The Board of Governors are all appointed for 14-year terms by the president and confirmed by congress. It operates per it's charter and laws set by congress. it is overseen by congress. There is no structure or mechanism for private ownership at this level; it is a government agency. Board members are forbidden by law to have any economic interest in a private bank. (Ref: Title 12 chapter 3 of the U.S. Legal Code). The Board determines monetary policy and provides high level oversight of the branches.

- How does a public central bank benefit the public? Probably the best way to explain is to look what it was like before we had the FRS.

Without a publicly owned central bank:

-There would be no national coordinated monetary policy. Each bank would expand or contract credit based on their immediate business needs, not the natons requirements.

- Smaller banks would be dependent on larger banks for credit extensions, currency, etc. History has shown that larger banks often consider smaller banks as competition and didn't care if they failed. (After 1935, the Fed was charged with looking after the overall health of the system)

- Federal Reserve notes would have to be replaced by... private bank notes? Treasury Notes?

- The Federal Government would have to do it's banking in large private banks

- In international monetary matters, the nations largest private banks would represent America

- There would be no elasticity to the currency. You would see more cycles of inflation/deflation, and boom/bust as we saw in the 1800s

- Banks would return to being audited soley by themselves in their shareholders interest. (After 1935, the Fed was charged with being the nations bank auditors to serve depositers interest as well.)

- Clearing of checks would go back to private clearinghouses often run by large banks. Without an impartial clearinghouse, decisions in the process would sway toward the private interests that control it.

Hope you find this useful

The Fed incorporates relatively some areas and there's a md over all of them. definite, they're all inner maximum banks. on a similar time as maximum international places have a effectual financial corporation (state-owned), the U. S. has the Fed that has sway over economic coverage interior the U. S..

It's government backed so that everyone with money in the bank does not lose their money if it's foreclosed.

-Matt

Simple.

It doesn't

The truth may hurt but it is still the truth!

FTWR