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24 Cards in this Set
- Front
- Back
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member banks
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commercial banks that are members of and hold stock in the fed.
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bank holding companies
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corporations that own one or more banks.
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Truth Lending act
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requires sellers to make complete and accurate disclosures to people who buy on credit .
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Regulation Z
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gives the fed authority to extend truth lending to retail, autos, banks , ect.
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Currency
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the paper componet of the money supply, made up of federal reserve notes - fiat paper money.
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Coins
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metallic forms of money such as pennies , nickles, dimes , quarters and the new dollar coin.
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Monetary Policy
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the expansion or contraction of the money supply in order to influence the cost and availibility of credit.
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Fractional Reserve System
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requires banks and other despository institutions to keep a fraction of their deposits in the form of legal reserves.
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Legal reserves
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consist of coins and currency that depository institutions hold in their vaults, plus deposits with the federal reserve district banks.
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Reserve requirement
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a rule stating that a percentage of every deposit be set aside as legal reserves.
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excess reserves
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legal reserves in excess of the reserve requirement , the funds th bank can lend to others who may want a loan.
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liabilities
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debts and obligation the organization has to others.
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assets
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the properties, possessions and claims an organization has on others.
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Balance sheet
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a condensed statement showing all assets and liabilities at a given time.
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net worth
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reflected on the balance sheet, the excess of assets over liabilities, which serves as a measure of the value of a business.
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liquidity
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the potential to be converted into cash in a very short time.
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Savings accounts and time deposits
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interest bearing deposits that cannot be withdrawn by check. ( savings requires no prior withdrawal notice)
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member bank reserve
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a deposit a member bank keeps at the fed to satisfy reserve requirements.
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easy money policy
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the fed allows money supply to grow and interest rates to fall, which normally stimulates the economy , people tend to buy on credit.
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tight money policy
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the fed restricts the growth of the money supply, which drives interest rates up, when interest rates are high consumers and businesses borrow and spend less which slows economic growth.
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discount rate
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the interest the fed charges on loans to financial institutions
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margin requirements
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minimum deposits left with a stockbroker to be used as a down payment to buy securities.
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Moral Suasion
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the use of persuasion such as announcements, press releases, articles in the papers, and testimony before congress.
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Selective Credit Controls
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credit rules pertaining to loans for specific commodities or purposes .
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