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Selling Our Services to the World Part 4 of 17 |
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Last Updated ( Monday, 08 December 2008 )
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| on December 08, 2008 03:14 PM |
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At the same time, I have been an advocate of using our various discount window facilities, within reason, to bridge the financial systems structural problems as the credit markets correct themselves and run the long Trader BO Divergence course of contrition.
Enough of that pleasantry. That is not what I came to speak about today. I dont know about you, but I am weary of the woeful stuff that is constantly blaring from our newspapers and television sets and the Net, compounded as it is in the throes of a presidential election. Today, I would like to talk about something more upliftingabout the good news documented in another of my favorite books, the Dallas Feds annual report, which we have placed on each of your chairs and will be releasing to the public after this luncheon.
I hail from one of those growing, prosperous Sunbelt cities that has burst forth as a center of U.S. economic growth in the past generation or two. Dallas is now the hub of the nations sixth largest metropolitan area, which joins the fifth largest metropolitan area in Houston and the ninth largest in the San AntonioAustin region to form the economic Stock &
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Federal Reserve and Monetary Policy Part 9 of 13 |
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Last Updated ( Sunday, 07 December 2008 )
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| on December 07, 2008 07:35 AM |
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The Discount Rate. The discount rate (officially the primary credit rate) is the interest rate the Federal Reserve Banks charge financial institutions for short-term loans of reserves. The volume of reserve balances supplied is usually only a small portion of the total supply of Ten Pips a Day Federal Reserve balances. However, at times of market disruption, such as the September 11, 2001, terrorist attacks, loans extended through the discount window can supply a considerable volume of Federal Reserve balances.
The Reserve Requirement. The reserve requirement is the percentage of deposits in demand deposit accounts that financial institutions must set aside and hold in reserve. If the Fed raises the reserve requirement, banks have less money to lend, which restrains the growth of the money supply. On the other hand, if the Fed lowers the reserve requirement, banks have more money to lend and the money supply increases. The Fed rarely changes Swing Trading; A Scientific Approach the reserve requirement. In fact, it is the least-used monetary policy tool because changes in the reserve requirement significantly affect financial institution operations. Reserve requirement changes are seen as a sign that monetary policy has swung strongly in a new direction.
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