Economic and Monetary Union

In order to enjoy the benefits of increased economic integration, 11 European countries formed the Economic and Monetary Union (EMU) and began using a common currency, the euro, on January 1, 1999. At the same time, each of the countries […]

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The Federal Reserve in the International Arena

As the central bank of the United States, the Federal Reserve plays a variety of roles in the international arena. By influencing interest rates, the Fed’s monetary policy

The Discount Window

Federal Reserve Banks lend funds to depository institutions at the discount window. All depository institutions that maintain transaction accounts or nonpersonal time deposits subject to reserve requirements are

Federal Funds

Fed funds are unsecured loans of reserve balances at Federal Reserve Banks between depository institutions. Banks keep reserve balances at the Federal Reserve Banks to meet their reserve

Open Market Operations

Open market operations are one of three basic tools used by the Federal Reserve to reach its monetary policy objectives. The other tools are changing the terms and

Primary Dealers

Primary dealers are banks and securities broker-dealers that trade in U.S. Government securities with the Federal Reserve Bank of New York. On behalf of the Federal Reserve System,

Repurchase and Reverse Repurchase Transactions

Among the tools used by the Federal Reserve System to achieve its monetary policy objectives is the temporary addition or subtraction of reserve balances via repurchase and reverse

Reserve Requirements

Reserve requirements are the portion of deposits that banks may not lend and have to keep either on hand or on deposit at a Federal Reserve Bank Reserve requirements,

Seasonal Borrowing

Federal Reserve Banks began extending seasonal credit in 1973 to help small depository institutions overcome strains placed on their reserves by seasonal pressures. Seasonal credit is one of

System Open Market Account

The System Open Market Account consists of the Federal Reserve’s domestic and foreign portfolios. The SOMA domestic portfolio consists of U.S. Treasury securities held on both an outright