Federal reserve system

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Issue:

Book Reports

 

Written by:

Amos M

 

Date added:

April 18, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

6 / 1480

 

Was viewed:

687 times

 

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Essay content:

The nation finally came to grips with the need for a central banking system with the creation of the Federal Reserve System in 1913. Among the weaknesses of the banking and monetary system that the Fed was designed to correct was the arrangement for holding reserves and the inflexibility of banks' ability to expand or contract note issues in response to business conditions...
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This was especially true of small banks that depended on large city correspondent banks to hold their reserves. Yet, during periods of general economic distress, the large banks were often unable to meet deposit withdrawal requests from their correspondents. One of the characteristics of an effective monetary system is the ability to increase or decrease the supply of credit as required by changing business conditions...
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