Question

What do economists mean when they say that the Federal Reserve Banks are central banks, quasi-public banks, and bankers’ banks?

Short answer

By the above statement, economists imply that the Federal Reserve Bank serves the functions of a central bank, quasi-public bank, and banker’ bank.

Step-by-step solution

Step 1. Federal Reserve Bank as central bank, quasi-public bank, and banker’s bank

The 12 Federal Reserves of The United bank serves as the central bank, quasi-public bank, and banker’s bank in the following ways.

Central Bank: Most of the nations around the world have one central bank, which is the apex institution of their financial system.The United States has 12 Federal Reserves that serve as the central bank of the nation.

Quasi-public Bank: The Federal Reserves are knownas quasi-public banks since they blend public and private ownership.The banks are owned by private bodies but controlled by the board, a public body.

Bankers’ Bank: The Federal Reserves are known as bankers’ banks since they provide banking facilities to commercial banks, like commercial banks that accept deposits and grant loans to the general public.