Question

Analyse federal provisions and institutions

Answer 1

The twelve Federal Reserve Banks provide banking services to depository institutions and the federal government. For depository institutions, they maintain accounts for reserve and clearing balances and provide various payment services, including collecting checks, electronically transferring funds, and distributing and receiving currency and coin. For the federal government, they act as fiscal agents. As such, the Reserve Banks maintain the Treasury Department's transaction account; pay Treasury checks; process electronic payments; and issue, transfer, and redeem U.S. government securities.

The Federal Reserve Banks have been providing payment services to the banking industry since shortly after the Federal Reserve System was established in 1913. Historically, these services were available only to banks that were members of the Federal Reserve, and they were generally provided without explicit charge.