This week we had the chance to visit one of the 12 regional Federal Reserve banks in the United States-Federal Reserve Bank of Boston. We listened to a presentation about the history, daily functions and responsibility about the bank.
The Federal Reserve Bank is the central bank of America which does researches about the economic activities, and make monetary policies. Its job to issuing money is crucial because issuing too much money will cause inflation, whereas issuing too less money will lead to recession. It also has the responsibility of payment system, and bank regulation and supervision.
The central bank in America differs from that in my own country because it is private. It has stockholders and earns revenue. However, it is a symbolic private bank. Firstly, stockholders cannot buy more shares or sell shares to others. They cannot get dividends either. Second, most of the revenue is given to the government. Nonetheless, it still reflects the individual freedom in American basic values. The Fed is not a fully government branch, so no one in the government can direct economic policies. Government control does not apply to the Fed. Similarly, even though one of the Fed's responsibilities is bank regulation and supervision, the Fed cannot directly regulate banks. It can only influence banks because they are other institutions regulating the commercial banks. As a result, not all the powers lie in one individual or group's hand, and it prevents the abuse of power.
The Federal Reserve Bank is the central bank of America which does researches about the economic activities, and make monetary policies. Its job to issuing money is crucial because issuing too much money will cause inflation, whereas issuing too less money will lead to recession. It also has the responsibility of payment system, and bank regulation and supervision.
The central bank in America differs from that in my own country because it is private. It has stockholders and earns revenue. However, it is a symbolic private bank. Firstly, stockholders cannot buy more shares or sell shares to others. They cannot get dividends either. Second, most of the revenue is given to the government. Nonetheless, it still reflects the individual freedom in American basic values. The Fed is not a fully government branch, so no one in the government can direct economic policies. Government control does not apply to the Fed. Similarly, even though one of the Fed's responsibilities is bank regulation and supervision, the Fed cannot directly regulate banks. It can only influence banks because they are other institutions regulating the commercial banks. As a result, not all the powers lie in one individual or group's hand, and it prevents the abuse of power.
Later we learned how to identify counterfeit money, which is very useful. We also got a pack of destroyed money. Sometimes when the money is too old or there is too much money in circulation, it will be destroyed. Hahaha~ ~Who will have too much money?^_^
After that, we continued our Freedom Trail. The harbor is very beautiful. We also went to the Old North Church where Paul Revere and other patriots put two lanterns to inform the invasion of British military. This steeple is where the lanterns used to be. 
Haaa, no one will too much money~~ I still think there are too few regulations and supervision on commercial banks so that every time it is innocent citizens that pay for the financial crisis.
ReplyDeleteYeah, i think so, the government is just a tool to control its citizens rather than help them. But free trade can not work well by itself either. That is a problem.
ReplyDeletevery thoughtful and great job~
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