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Describe the functions that the FED performs for the banking community. 

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lilylee | Student, College Freshman | (Level 1) Salutatorian

Posted June 13, 2013 at 11:12 AM via web

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Describe the functions that the FED performs for the banking community. 

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readerofbooks | College Teacher | (Level 2) Educator Emeritus

Posted June 13, 2013 at 11:38 PM (Answer #1)

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Generally speaking there are three main roles for the Federal Bank. That said, it is best to start with the their goal. The Fed's mandate is:

"to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates"

First, the Fed adjusts and sets interest rates to keep the economy growing. What the Fed wants is a moderate amount of inflation.

Second, the Fed oversees the banks to make sure that they are in line with regulatory principles. Compliance is a buzz word here. 

Third, the Fed watches jobless rate to make sure that the United States has enough jobs. 

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