AYPO REAL ESTATE UPDATED ACTUAL FINAL PAPER
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔The Federal Reserve System (The Fed) - ✔✔privately owned, publicly controlled,
central bank of the United States. Established 1913
✔✔Fed Structure - ✔✔The Fed is made up of a central board of governors located in
Washington D.C.
The Board of Governors, known as the Federal Reserve Board (FRB) is composed of
seven 14-year term presidential appointees (confirmed by the Senate). The FRB is
headed by a chair and vice-chair, also Presidential appointees, who serve four-year
terms.
(1) a central governing Board (7), (2) a decentralized operating structure of 12 Reserve
Banks, and (3) a combination of public and private characteristics.
Key Elements: the Board of Governors, the Federal Reserve Banks (Reserve Banks),
and the Federal Open Market Committee (FOMC).
✔✔The Fed Responsibilities - ✔✔the FRB oversees the 12 regional Federal Reserve
banks which, along with 25 associated branches, supervise private banks in each
region.
✔✔Coordination & Collaboration of the 12 Reserve Banks - ✔✔Federal Reserve Act in
1933 and 1935 that together created the modern-day Federal Open Market Committee
(FOMC).
The Depository Institutions Deregulation and Monetary Control Act of 1980 (Monetary
Control Act) introduced an even greater degree of coordination among Reserve Banks
with respect to the pricing of financial services offered to depository institutions
✔✔The Federal Open Market Committee - ✔✔The FOMC consists of 12 members,
holds eight regularly scheduled meetings per year. At these meetings, the Committee
reviews economic and financial conditions, determines the appropriate stance of
monetary policy, and assesses the risks to its long-run goals of price stability and
sustainable economic growth
The Fed does, however, seek to help control inflation through a series of influencing
tactics. These measures include managing credit, the largest component of the money
supply, by raising interest rates and making credit more expensive during inflationary
periods, which reduces the money supply, and in turn, curbs inflation.
✔✔Credit instruments - ✔✔Credit instruments simply document the details of credit and
debit, and come in forms such as promissory notes, checks, bills of exchange, bank
drafts, etc.
,✔✔Open Market Operations - ✔✔There are two types of OMOs: permanent and
temporary. Permanent OMOs entail outright purchases or sales of securities for the
Fed's portfolio. During and after the most recent financial crisis, they were used to
adjust the Fed's holdings of securities to pressure longer-term interest rates downward
to make financial conditions more business friendly.
Temporary OMOs typically are used to address reserve needs that are deemed to be
more transitory, i.e., temporary in nature. These transactions are either repurchase
agreements or reverse repurchase agreements. With a repurchase agreement, a
security generally is bought under an agreement to resell it in the future. This is the
economic equivalent to a collateralized loan by the Fed, in which the difference between
the purchase and sale prices acts as interest. Under a reverse repurchase, the security
is sold under an agreement to buy it back it in the future.
✔✔The Treasury Department (the Dept.), - ✔✔The Dept. operates and maintains
essential financial systems, such as:
Producing coin and currency
Disbursing payments to the American public
Collecting revenues
Borrowing funds required to run the government
Treasury is divided into two major sections: the Departmental offices and the operating
bureaus, with the former primarily responsible for policy formulation and Department
administration, while the operating bureaus execute the specific policies and activities
central to the Dept.'s function.
The Dept.'s basic functions include, but are not limited to:
- Managing federal finances
- Collecting taxes, duties, and monies paid to and/or due to the U.S.
-Paying all of the U.S.'s bills
-Currency and coinage
-Managing government accounts
-Managing public debt
-Overseeing national banks and thrift institutions
-Advising on domestic and international fiscal policy
-Enforcing federal finance and tax laws
- Investigating and prosecuting tax evaders, counterfeiters, and forgers
✔✔The Federal Deposit Insurance Corp (FDIC) - ✔✔Insuring deposits;
Examining and supervising financial institutions for safety and soundness and consumer
protection;
Making large and complex financial institutions resolvable; and
Managing receiverships.
The FDIC's goal is to be a leader in promoting sound public policies, addressing risks in
the nation's financial system, and performing its insurance, supervisory, consumer
protection, resolution planning, and receivership management responsibilities.
, The FDIC also acts as receiver for failed insured depository institutions (IDIs), and has
resolution planning responsibilities (jointly with the FRB) for large and complex financial
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act).
The FDIC carries out its mission through three major programs: insurance, supervision,
and receivership management.
FDIC is the primary supervisor of state-chartered banks and savings institutions that are
not members of the Federal Reserve System.
✔✔Receivership Management - ✔✔Receivership is a corporate bankruptcy situation in
which a third party is appointed by bankruptcy courts or creditors to run the company.
The third party is called the "receiver."
When an insured depository institution fails, the FDIC is the third party most commonly
appointed as receiver. The FDIC/receiver assumes responsibility for recovering as
much as possible from the disposition of the assets and pursuit of the failing institution's
claims, in the most efficient manner reasonably attainable. The FDIC's goal in
receivership management is to complete the process as swiftly and efficiently as
possible. Once completed with the disposition of the institution's assets and having
resolved all obligations, claims, and other legal requirements, the receivership is
terminated, and a final distribution is made to its creditors.
✔✔The Federal Home Loan Bank System (FHLB) - ✔✔A system of regional banks from
which local lending institutions everywhere in America borrow funds to finance housing,
economic development, infrastructure and jobs.
The FHLBanks fund themselves primarily through the issuance of "consolidated
obligations," that is, through debt instruments such as bonds and discount notes, in the
public capital markets through their agent, the Office of Finance. Although each
FHLBank is a separately operated corporate entity with its own management and board
of directors, they are, as a group, jointly and severally liable for all FHLB consolidated
obligation debt.
✔✔Bank Membership - ✔✔To qualify to be a member of the FHLB System there are
certain statutory requirements of the institutions, including:
-Being duly organized under the laws of any U.S. state
-Being subject to inspection and regulation under the banking laws, or similar state or
federal laws
-Must make long-term home mortgage loans
-Must have at least 10%t of total assets in residential mortgage loans (if it is a federally
insured depository institution)
-Must be in a financial condition enabling FHLBank advances to be executed safely
-Must have character of management and a home financing policy consistent with
sound and economical home financing
QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔The Federal Reserve System (The Fed) - ✔✔privately owned, publicly controlled,
central bank of the United States. Established 1913
✔✔Fed Structure - ✔✔The Fed is made up of a central board of governors located in
Washington D.C.
The Board of Governors, known as the Federal Reserve Board (FRB) is composed of
seven 14-year term presidential appointees (confirmed by the Senate). The FRB is
headed by a chair and vice-chair, also Presidential appointees, who serve four-year
terms.
(1) a central governing Board (7), (2) a decentralized operating structure of 12 Reserve
Banks, and (3) a combination of public and private characteristics.
Key Elements: the Board of Governors, the Federal Reserve Banks (Reserve Banks),
and the Federal Open Market Committee (FOMC).
✔✔The Fed Responsibilities - ✔✔the FRB oversees the 12 regional Federal Reserve
banks which, along with 25 associated branches, supervise private banks in each
region.
✔✔Coordination & Collaboration of the 12 Reserve Banks - ✔✔Federal Reserve Act in
1933 and 1935 that together created the modern-day Federal Open Market Committee
(FOMC).
The Depository Institutions Deregulation and Monetary Control Act of 1980 (Monetary
Control Act) introduced an even greater degree of coordination among Reserve Banks
with respect to the pricing of financial services offered to depository institutions
✔✔The Federal Open Market Committee - ✔✔The FOMC consists of 12 members,
holds eight regularly scheduled meetings per year. At these meetings, the Committee
reviews economic and financial conditions, determines the appropriate stance of
monetary policy, and assesses the risks to its long-run goals of price stability and
sustainable economic growth
The Fed does, however, seek to help control inflation through a series of influencing
tactics. These measures include managing credit, the largest component of the money
supply, by raising interest rates and making credit more expensive during inflationary
periods, which reduces the money supply, and in turn, curbs inflation.
✔✔Credit instruments - ✔✔Credit instruments simply document the details of credit and
debit, and come in forms such as promissory notes, checks, bills of exchange, bank
drafts, etc.
,✔✔Open Market Operations - ✔✔There are two types of OMOs: permanent and
temporary. Permanent OMOs entail outright purchases or sales of securities for the
Fed's portfolio. During and after the most recent financial crisis, they were used to
adjust the Fed's holdings of securities to pressure longer-term interest rates downward
to make financial conditions more business friendly.
Temporary OMOs typically are used to address reserve needs that are deemed to be
more transitory, i.e., temporary in nature. These transactions are either repurchase
agreements or reverse repurchase agreements. With a repurchase agreement, a
security generally is bought under an agreement to resell it in the future. This is the
economic equivalent to a collateralized loan by the Fed, in which the difference between
the purchase and sale prices acts as interest. Under a reverse repurchase, the security
is sold under an agreement to buy it back it in the future.
✔✔The Treasury Department (the Dept.), - ✔✔The Dept. operates and maintains
essential financial systems, such as:
Producing coin and currency
Disbursing payments to the American public
Collecting revenues
Borrowing funds required to run the government
Treasury is divided into two major sections: the Departmental offices and the operating
bureaus, with the former primarily responsible for policy formulation and Department
administration, while the operating bureaus execute the specific policies and activities
central to the Dept.'s function.
The Dept.'s basic functions include, but are not limited to:
- Managing federal finances
- Collecting taxes, duties, and monies paid to and/or due to the U.S.
-Paying all of the U.S.'s bills
-Currency and coinage
-Managing government accounts
-Managing public debt
-Overseeing national banks and thrift institutions
-Advising on domestic and international fiscal policy
-Enforcing federal finance and tax laws
- Investigating and prosecuting tax evaders, counterfeiters, and forgers
✔✔The Federal Deposit Insurance Corp (FDIC) - ✔✔Insuring deposits;
Examining and supervising financial institutions for safety and soundness and consumer
protection;
Making large and complex financial institutions resolvable; and
Managing receiverships.
The FDIC's goal is to be a leader in promoting sound public policies, addressing risks in
the nation's financial system, and performing its insurance, supervisory, consumer
protection, resolution planning, and receivership management responsibilities.
, The FDIC also acts as receiver for failed insured depository institutions (IDIs), and has
resolution planning responsibilities (jointly with the FRB) for large and complex financial
companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act).
The FDIC carries out its mission through three major programs: insurance, supervision,
and receivership management.
FDIC is the primary supervisor of state-chartered banks and savings institutions that are
not members of the Federal Reserve System.
✔✔Receivership Management - ✔✔Receivership is a corporate bankruptcy situation in
which a third party is appointed by bankruptcy courts or creditors to run the company.
The third party is called the "receiver."
When an insured depository institution fails, the FDIC is the third party most commonly
appointed as receiver. The FDIC/receiver assumes responsibility for recovering as
much as possible from the disposition of the assets and pursuit of the failing institution's
claims, in the most efficient manner reasonably attainable. The FDIC's goal in
receivership management is to complete the process as swiftly and efficiently as
possible. Once completed with the disposition of the institution's assets and having
resolved all obligations, claims, and other legal requirements, the receivership is
terminated, and a final distribution is made to its creditors.
✔✔The Federal Home Loan Bank System (FHLB) - ✔✔A system of regional banks from
which local lending institutions everywhere in America borrow funds to finance housing,
economic development, infrastructure and jobs.
The FHLBanks fund themselves primarily through the issuance of "consolidated
obligations," that is, through debt instruments such as bonds and discount notes, in the
public capital markets through their agent, the Office of Finance. Although each
FHLBank is a separately operated corporate entity with its own management and board
of directors, they are, as a group, jointly and severally liable for all FHLB consolidated
obligation debt.
✔✔Bank Membership - ✔✔To qualify to be a member of the FHLB System there are
certain statutory requirements of the institutions, including:
-Being duly organized under the laws of any U.S. state
-Being subject to inspection and regulation under the banking laws, or similar state or
federal laws
-Must make long-term home mortgage loans
-Must have at least 10%t of total assets in residential mortgage loans (if it is a federally
insured depository institution)
-Must be in a financial condition enabling FHLBank advances to be executed safely
-Must have character of management and a home financing policy consistent with
sound and economical home financing
