What key roles does the Federal Reserve System perform in the banking and financial system?
Answer to relevant QuestionsWhat is the Glass-Steagall Act, and why was it important in banking history? What new regulatory issues remain to be resolved now that interstate banking is possible and security and insurance services are allowed to commingle with banking?How does the Fed affect the banking and financial system through open market operations (OMO)? Why is OMO the preferred tool for many central banks around the globe?How did the Equal Credit Opportunity Act and the Community Reinvestment Act address discrimination?Suppose the Fed purchases $500 million in government securities from a primary dealer. What will happen to the level of legal reserves in the banking system and by how much will they change?
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