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Complexities Of The US Financial System

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Complexities of the U.S. Financial System Over the years, the US financial system has been undergoing many changes. As a result, the financial system has impacted the businesses, the economy, and individuals in the US. Financial markets make a major impact on how the financial system operates and the success of the economy. In addition, financial markets stimulates the flow of capital and expenditures, therefore, they play a vital role in the success or failure of the US economy.
The United States’ financial markets play a vital role in the economy because it can either bring a success or a decline in the economy. This is so because, if people do not invest in the businesses, the financial markets will not be able to meet the needs …show more content…

Most businesses are limited by the capital they can raise while starting a business. Businesses can only experience a positive impact if the markets are favorable, nonetheless, they can also flourish on their performance but there needs to be funding. The financial market impacts businesses when it comes to accessing credit (Chong and Miffre 1180). Apart from businesses, the financial market affects individuals. Individuals’ will always want to spend their money if the financial market if performing well because they are able to borrow money in banks as well as spending it. However, it the financial markets deteriorate, the consumers become afraid of spending their money freely (Milicher and Norton 78). The US Federal Reserve plays a primary role in the country’s economic environment as it is the central bank. First, the Federal Reserve regulates and supervises banks and other financial institutions in order to maintain a stable financial system. Moreover, it provides financial services to the government and other US financial institutions (Baker 108). Lastly, the key role of the Federal Reserve is to oversee the nation’s credit and monetary conditions as well as the payment systems. The Federal Reserve chairman is seen as the public face of the Federal Reserve Bank. The work of the chairman is to steer the Federal Reserve towards a consensus while setting the interest rates of the banks in the country. In addition, …show more content…

The board formulates the monetary policy because these board members make key decisions on the availability of finances and credit in the economy. After setting up reserve requirements, the board is able to share the requirements with reserve banks as well as supervising and regulating their discount rates. The Federal Reserve board has been effective in today’s economic environment because of its responsibility of making key decisions on the US financial system. The Chairman, the board, and U.S Federal Reserve plays a vital role in saving financial institutions and employing unconventional facilities in lending to make sure the world economy does not deteriorate. (Bernanke,

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