The Two Most Important Central Banks in the World

On paper at least, the national give up is such an independent entity, though at that place are those who doubt that it is as politically insulated as it is hypothetical to be. The federal Reserve is run by a mount of seven regulators appointed by the chair. The chairman, also selected by the president, has a quartet-year, renewable term, while the separate six have 14-year terms, with superstar member retiring every two years. If a governor should retire early, his successor takes over for what remains of his term. This system is mean to prevent a new occupant of the White domicile from packing the board with people of his political persuasion.

The Federal Reserve Board sets the discount rate, simply the real policy-making body for the Federal reserve is the Federal Open Market perpetration (FOMC), which fixes the federal-funds rate, or the rate at which banks lend to one another, and decides financial growth targets. There are seven board members on the committee, each with one vote, plus the 12 presidents of the district Federal Reserve banks, only five of whom can vote at any one time. The president of the Federal Reserve marge of New York has a permanent vote, while the remaining four votes are shared among the other presidents in rotation for one-year terms.

The 12 are not chosen by the president but by private citizens on the boards of their banks, subject to the compliment of the governors of the Fed

"Like a hurricane," The economist (November 9, 1991), p. 93.

"The Fed Jumps in for Some Second-Half Help," Business Week (July 20, 1992), pp. 21-22.

The Federal Reserve often works with other central banks to to take up about a change in policy on a larger scale. The Wall track Journal report last summer that the Fed along with thirteen other central banks had intervened repeatedly in world currency markets to sustain the sagging dollar. Some saw this effort as an wrong failure, however, feeling that it would invite further speculative attempts over the glide slope weeks to drive U.S. lower (August 12, 1992).

"Central Banks Intervene to Aid Dollar, but Effort Doesn't Give It a Strong Boost," The Wall Street Journal

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