Question

Discuss with example about   federal reserve system & explain how banks’ balance sheets are formed?​

Answer 1

Explanation:

The 10th edition of The Federal Reserve System Purposes & Functions details the structure, responsibilities, and aims of the U.S. central banking system. The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy and, more generally, to serve the public interest. It includes three key entities: the Board of Governors, 12 Federal Reserve Banks, and the Federal Open Market Committee.

A Bank's Balance Sheet. A balance sheet is an accounting tool that lists assets and liabilities. ... The net worth is the asset value minus how much is owed (the liability). A bank's balance sheet operates in much the same way. A bank's net worth is also referred to as bank capital.