Banks

WHere are the federal reserve banks?

There are twelve Federal Reserve Banks in the United States. These banks include the Federal Reserve Bank of Boston, the Federal Reserve Bank of New York, the Federal Reserve Bank of Philadelphia, the Federal Reserve Bank of Cleveland, the Federal Reserve Bank of Richmond, the Federal Reserve Bank of Atlanta, the Federal Reserve Bank of Chicago, the Federal Reserve Bank of St. Louis, the Federal Reserve Bank of Minneapolis, the Federal Reserve Bank of Kansas City, the Federal Reserve Bank of Dallas, and the Federal Reserve Bank of San Francisco.

It is the responsibility of these twelve banks to protect the economic interests of their region and ensure that the public has a say in banking decisions. These banks do not operate for profit, although they do have income from interest on loans. All of the money that is left in these banks after their operational expenses are covered is given back to the US Treasury.

Interaction with commercial banks

The Federal Reserve sets a minimum amount of cash that all commercial banks in the United States have on hand. That amount is called the reserve ratio. The reserve ratio is directly responsible for the money supply in a country. A decrease in the ratio will allow the bank to lend more, thereby increasing the supply of money. An increase in the ratio will have the opposite effect.

interaction with The Economy

One of the primary responsibilities of the Federal Reserve is to ensure that the economy in the United States remains stable. When facing an economic downturn, the Federal Reserve increases the supply of money available to encourage growth. When inflation becomes an issue, the Federal Reserve decreases the supply of money.