Federal Reserve Paper

Federal Reserve Banks

ECO 372

The Federal Reserve Banks operate in the United States under the supervision of the Board of Governors in Washington. Each bank consists of board members who work with operations. The Federal Reserve Bank generates income from interest earned on government securities. The monetary policy generates income. The other form of income is comes from the Monetary Control Act of 1980. The act requires a price of services to depository institutions. The Federal Reserve does not operate for profits and the United States treasury receives earnings on a yearly basis.

The Federal Reserve sets the baseline or the average for the interest rates. This is what other banks base their interest rates. The Federal Reserve can inject and take money out of the...