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The Market Stability Regulator Would Take on the Traditional Role

question 39

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The market stability regulator would take on the traditional role of the Federal Reserve by giving it the responsibility and authority to ensure overall financial market stability.


Definitions:

Individual Bank

A financial institution that deals with consumers and businesses to offer deposit, loan, and investment services on an individual basis.

Discount Rate

The cost in interest that commercial banks and similar storage institutions incur on borrowing from their regional Federal Reserve Bank’s loaning service.

Federal Reserve District Banks

The 12 banks that make up the Federal Reserve System, serving as the central banking system of the United States, each serving a specific geographic district.

Reserve-Requirement Ratio

The fraction of deposits that banks are required by law to keep on hand as reserves or at the central bank.

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