Question

Identify the major responsibilities of the Federal Reserve System.

Short answer

The Federal Reserve System's major responsibilities are to conduct the nation's monetary policy, supervise and regulate banks and other financial institutions, maintain the stability of the financial system, and provide certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions.

Step-by-step solution

Understand the Federal Reserve System

The Federal Reserve System (Fed) is the central banking system of the United States. It was established to provide the country with a safe, flexible, and stable monetary and financial system.

Identify the main responsibilities

The Federal Reserve System has several key responsibilities. These include: 1) Conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices. 2) Supervising and regulating banks and other important financial institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers. 3) Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets. 4) Providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions, and playing a major role in operating and overseeing the nation's payments system.

Summarize the responsibilities

In summary, the Federal Reserve System is responsible for conducting monetary policy, supervision and regulation of financial institutions,maintaining the stability of the nation's financial system, and providing financial services to certain institutions.