Finance, Forex and Investments

What services does the Fed provide to commercial banks?

What services does the Fed provide to commercial banks? I really need help with this question please!

Public Comments

1. A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system within its country's borders. A central bank is distinguished from a normal commercial bank because it has a monopoly on creating the currency of that nation, which is usually that nation's legal tender. The primary function of a central bank is to provide the nation's money supply, but more active duties include controlling interest rates, and acting as a lender of last resort to the banking sector during times of financial crisis. It may also have supervisory powers, to ensure that banks and other financial institutions do not behave recklessly or fraudulently. Functions of a central bank may include: * implementing monetary policy * determining Interest rates * controlling the nation's entire money supply * the Government's banker and the bankers' bank ("lender of last resort") * managing the country's foreign exchange and gold reserves and the Government's stock register * regulating and supervising the banking industry * setting the official interest rate – used to manage both inflation and the country's exchange rate – and ensuring that this rate takes effect via a variety of policy mechanisms Most developed nations today have an "independent" central bank, that is one which operates under rules designed to prevent political interference. Examples include the European Central Bank (ECB) and the Federal Reserve System in the United States.