Question

The Fed should be regulated by the congress and/or president? What are 3 regulations

Answer 1

The federal reserve system is the central banking system of United States of America. It was created on December 23 , 1913 , with the enactment of the Federal reserve Act , after a series of financial panics ( particularly the panic of 1907) led to the desire for central control of the monetory system in order to alliviale the financial crisis and panic. The federal reserve system is composed of several layers. It is governed by the presidentially appointed board of governers or federal reserve board ( FRB). There are also various advisory councils . Thus the Federal reserve has both a public and private components.

Whether the Fed should be regulated by the Congress or president or it should be independent is debatable. Many feel that the Fed should remain independent of the national politics. Yet , Noble winning economist Milton friedman is of the view that the fed should be brought under the direct control of either the Congress or the treasury. An alternative structure for the central bank might improve accountability.

The US Congress established three regulations or key objectives for monetory policy:

1) maximizing employment. 2) stabilizing prices. 3) moderating long term interest rates

The first two are also known as Federal reserv's dual mandate. Over the years there has been tremendous growth in every aspect of federal reserve , including functions , duties and objectives.