Federal Reserve Role In Global Central Banking University Essay Example

Introduction

The United States Central bank system is known as the Federal Reserve (Fed). President Woodrow Wilson established The Federal Reserve in 1913 by signing the Act into law to improve the country’s financial and monetary conditions (West, 2019). The primary duties of the Fed are to maintain financial stability, conduct national economic policy, provide banking services, and regulate and supervise banks. There are not many differences comparing the Fed with other global central banks. For example, central banks validate monetary policy, tightening and easing credit and money supply availability. As a result, the central bank’s goal is to maintain a country’s financial stability. For example, the amount of money reserve institutions must uphold about deposits is something the central banks set. (Liana-Antonela, 2018). This paper focuses on the role of the Federal Reserve in global central banking.

The Organization/ Structure of the Federal Reserve

It’s important to remember that the central bank has the last say on interest rate changes. Central banks can impact macroeconomic policy, which reduces inflation and employment as its end goal. The Fed is tasked with overseeing the country’s banking sector or, in part, protecting bank depositors and maintaining a healthy bank balance sheet. All but a few countries have currency boards or central banks. The most well-known central banks globally include the ECB, the BoE, the Bank of Japan, and the Fed.

Unlike most banks, the Fed mixes the representation from private sector banks with the government appointees hence semi-decentralized. In the United States, the Fed is run by a board of governors that the president appoints. The Senate has voted to accept the appointment. Located in Washington DC, the Board of Governors has seven members. They are elected for a 14-year term to ensure long-term stability and continuity. The staggered terms are intended to provide that the Board of Governors makes policy decisions based on their economic merits rather than political influence. However, they are isolated from the political pressure. Political the chairman and the deputy are appointed after every four years and may be reappointed if they see as incompetent. The responsibilities of the Board of Governors are to oversee the nation’s payment system, administer specific consumer protection regulations, and control over financial services industry. They manage the activities of the reserve banks. The Board approves the nomination of the president of the reserve banks of Governors. They also support some of the members of the reserve banks and their presidents.

The whole of the Fed System as a total comprises many different bodies. It consists of 12 Federal Reserve Banks overseen by the directors. These banks run the Fed’s operations and serve regions throughout the country. Except for three, each District has additional offices to assist depository institutions and the general public. The Reserve Banks’ job is to handle all of the Treasury’s financial transactions and support the Treasury in its cash management and investment activities. In their research efforts, Reserve Banks examine regional, national, and international economic issues. Reserve, the reserve bank president, attends FOMC meetings to benefit from research that provides a wide range of viewpoints on the economy.

The Board of directors of each Reserve Bank is in charge of monitoring the operations and management of the District bank. These directors represent the different interests of each bank, providing leadership in the local business and the community, and leadership. The BOD provides the Reserve Bank with a private-sector perspective. Other parts of the Fed include the member banks, other depository institutions, and the federal market committee. 8,039 Commercial banks make up 38% of the member banks in the United States.

On the other hand, about 17,000 other depositories provide banking services to the American people and the approximately 3,000 member banks. Depository institutions such as credit unions, loan and savings associations, and non-member commercial banks make up most. They are subject to Federal Reserve System laws (including reserve requirements) and can use System payments services while not legally a system member. FOMC is the Fed’s monetary policymaking body that makes the decisions. Economic growth and price stability are the primary goals of this agency. The FOMC is responsible for regulating the country’s money supply.

Similarities and Differences of the Fed with Other Central Banks

Central banks are financial institutions with exclusive authority over money and credit production for a nation or set of countries. Monetary policy and banking regulation are generally the responsibility of central banks in today’s modern economies. Therefore, unlike cryptocurrencies, banks are centralized. The Federal Reserve is semi-decentralized. The Federal Reserve has existed for over 100 years now. The United States has been the global engine for growth and innovation (Shapiro & Wilson, 2021, January). Since the funding of the Federal Reserve, America has come out as one of the most powerful nations in the nation. The Fed is the most powerful central bank that serves as the leading global monetary affairs. The existence of the Fed has influenced the formation of other central banks worldwide, including the ECB. The ECB was established in the year 1978. Therefore, its structure and characteristics are similar to those of the Fed.

Centralization and decentralization are the most critical features of the ECB and the Fed. It is only by incorporating and including regional viewpoints into monetary policy that it is possible to reflect the economic demands of the countries properly. The Board of governors of the ECB and the fed have similar roles. The Board of governors based in Washington has seven members that function identical to the executive board members based in Frankfurt (Walerych & Wesołowski, 2021). When making monetary policy in the U.S., the Fed’s governors oversee the presidents of each of the 12 district banks. The ECB’s governing council, which includes the directors of the NCBs and the Executive Board, makes monetary policy decisions across Europe. In both circumstances, a diverse range of perspectives must be represented on the committee’s Board.

Nonetheless, the Fed is relatively more centralized. The governing council makes the decision-making body in the ECB. The executive Board has fewer votes than the NCB governors (Liana-Antonela, 2018). In the case of the Fed, by contrast, the Board retains the majority of votes on the FOMC. The decision-making powers are on the FOMC matters.

Another critical difference is that the U.S. Reserve Banks do not belong to any state, and each one represents a region that includes many conditions. As a result, it is more likely that Reserve Banks will serve the interests of all Americans, rather than just the interests of one particular state, as in the Eurosystem, where the authority of each NCB coincides with the borders of a single country. In the case of the Eurosystem, this limitation to amalgamation consider a more fundamental rule in the organization of the EU and the euro region. In contrast to the United States, the European Union is still a union of independent states without a powerful joint government. The legal wording of their mandates is perhaps the most notable difference between the ECB and the Federal Reserve. The ECB’s mandate is focused on one aim, but the Federal Reserve’s charter lists numerous purposes and does not provide exact information on their relative importance. The Federal Reserve faces difficulties interpreting its mandate because of a lack of clarity.

The similarities between the interpretations of the mandate of both banks, which have been operating since 1912, are noteworthy. However, the more recent developments suggest that the lack of clarity comes at a cost. As a part of the Fed’s response to the crisis, they provided a numerical definition of price stability and improvements in its communication. Both Fed and the ECB belong to the areas with the leading economy. Besides, they both have the largest GDP in the world. The dependence of both banks is dependent on economic and political independence. The ECB is more dependent than the Fed because the members of the Fed are appointed by the president and afterwards authorized by the Senate. However, the European Parliament has no power to make decisions for the ECB. The Fed lacks political independence since the state controls the exchange rates. On the other hand, the exchange rate in the ECB is not a national policy, and no government can determine it.

Conclusion

The legal wording of their mandates is perhaps the most notable difference between the ECB and the Federal Reserve. The ECB’s mandate is focused on one aim, but the Federal Reserve’s charter lists numerous purposes and does not provide exact information on their relative importance. The Federal Reserve faces difficulties interpreting its mandate because of a lack of clarity. The ESCB, which includes the NCBs, has its principal purpose of maintaining price stability (Derbali et al., 2020). When it comes to the Federal Reserve, though, it has a “dual mandate” that places equal weight on ensuring that the economy is growing and creating jobs. The Fed should advance the objective of maximum employment, pricing stability, and reasonable long-term interest rates successfully.

References

Derbali, A., Jamel, L., Ltaifa, M. B., Elnagar, A. K., & Lamouchi, A. (2020). Fed and ECB: which is informative in determining the DCC between bitcoin and energy commodities?. Journal of Capital Markets Studies. Retrieved from: https://www.emerald.com/insight/content/doi/10.1108/JCMS-07-2020-0022/full/html

Liana-Antonela, B. M. (2018). A Comparative Analysis of FED and ECB Reactions to the Global Financial Crisis. Ovidius University Annals, Economic Sciences Series18(1), 7-11. Retrieved from: https://stec.univ-ovidius.ro/html/anale/RO/wp-content/uploads/2018/08/2.pdf

Shapiro, A. H., & Wilson, D. (2021, January). Taking the fed at its word: A new approach to estimating central bank objectives using text analysis. Federal Reserve Bank of San Francisco. Retrieved from: https://www.frbsf.org/economic-research/publications/working-papers/2019/02/?utm_source=mailchimp&utm_medium=email&utm_campaign=working-papers

Walerych, M., & Wesołowski, G. (2021). Fed and ECB monetary policy spillovers to Emerging Market Economies. Journal of Macroeconomics70, 103345. Retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0164070421000483

West, R. C. (2019). Banking reform and the Federal Reserve, 1863-1923. In Banking Reform and the Federal Reserve, 1863-1923. Cornell University Press. Retrieved from: https://www.degruyter.com/document/doi/10.7591/9781501743849/html

Essay On Federalism Sample Paper

Federalism is a political structure that enables distinct states or other polities to coexist peacefully within a larger political structure. Federal systems accomplish this by mandating that fundamental policies be decided upon and carried out after some dialogue, allowing for the participation of all members in the decision-making process. Even though many different federal political structures are distinct in many respects, they nonetheless appear to share a few traits and guiding ideas.

Written Constitution

First, the federal relationship is defined in a written constitution that describes how power is shared or distributed. The constitution is only changed through extraordinary methods (Tikkanen). These constitutions are unique in how they relate to the people, the federal union of states, and the federal government.

Noncentralization

Second, for the political system to really represent the constitution, it must genuinely distribute power across several self-sustaining centers. Noncentralization may describe this kind of power dispersion (Tikkanen). The concept of noncentralization ensures that the federal and state governments cannot lose their right to exercise political power without widespread agreement.

Areal Division of Power

What is known as territorial democracy in the US is the third component of any federal government. It has two forms: using geographic boundaries to maintain balance and fairness in the involvement of various parties and interests in the polity and using such divides to provide regional independence and inclusion for various factions within the same civil society (Tikkanen). Territorial neutrality has shown to be quite helpful in evolving societies, providing for the inclusion of new activities following their power merely by enabling their followers to vote in nearly equal territorial units. The potential of federal systems to serve as instruments of political unification while maintaining democratic democracy has improved due to the accommodation of extremely varied parties whose distinctions are inherent rather than temporary.

Elements of Maintaining Union (80)

Most modern federal systems offer open contact channels between the populace and all the governments representing them. All governments may, and typically run initiatives that benefit the ordinary voter, and the people may and typically do elect delegates. One characteristic that sets federations apart from confederations is the presence of these direct channels of contact (Tikkanen). Typically, it is built on a feeling of shared nationality that unites the component policies and populations. In this regard, the need for a shared defense against common foes served as both a catalyst for the formation of the federal union and a motivating factor for its continuation.

Elements Maintaining Noncentralization

For a federal system to function, the component polities’ demographic and economy must be about equal, or their disparities must be compensated either geographically or statistically. Every other successful federal system uses a similar allocation of power. A lack of harmony among the component polities has frequently been one of the main causes of federal systems failing. Permanent internal boundaries have been another attribute of effective federal systems (Tikkanen). Boundary adjustments are possible, but they must be approved by all parties and generally avoided unless necessary. The presence of a noncentralized party system is the single most crucial component in the sustainability of federal noncentralization.

Elements maintaining the Federal Principle

The federal principle itself is upheld through several mechanisms present in federal systems. Two of these are very significant. The central government and the component polities must have full governing structures, with the authority to amend those entities independently within the bounds defined by the agreement to maintain federalism. Historically, policies with federal systems heavily impacted by federal principles have been the most enduring and steady (Tikkanen). But for federal systems to work effectively, there must be a specific political landscape that supports a democratic regime and has the necessary cultural norms of agreements and restraint. In addition, federal systems function best in societies where core interests are sufficiently homogeneous to provide local governments with many leeways and enable dependence on voluntary cooperation.

Conclusion

Although there are various federal political institutions, they appear to have certain common characteristics and guiding principles. Federal political structures have a written constitution, use noncentralization, ensure areal division of power, and are characterized by elements of maintaining the union, maintaining noncentralization, and maintaining the federal principle. The political tenets that drive federal systems emphasize the value of collaboration and negotiation.

Work Cited

Tikkanen, Amy. “Federalism: Political Science.” Britannica, www.britannica.com/topic/federalism. Accessed 14 Oct. 2022.

Fetal Alcohol Syndrome; Children With Fetal Alcohol Syndrome And Their Academic Performance Sample College Essay

Abstract

Fetal Alcohol Syndrome (FAS) is a resultant condition in children born to drinking women during their gestation period. The state inevitably leads to brain damage and deters proper child growth. The problems resulting from FAS vary from one child to another, and these defects are sadly irreversible. Children with FAS experience learning, vision, hearing, memory, and attention span challenges. This explains why most of these children generally have difficulty at school. A particular area of weakness for children with FAS is their deficiency in mathematical skills and poor ignition of mathematical information relayed to them. Studies and experiments reveal an apparent flaw in the mathematical cognition of individuals faced with intrauterine alcohol exposure. They display little If no recognition of erroneous calculations but perform better in other disciplines. These individuals are capable of performing better, especially in mathematics, given proper attention. These children’s academic success relies on teachers’ and parents’ capacity to understand these children and accommodate them accordingly.

Fetal Alcohol Syndrome

Fetal Alcohol Syndrome (FAS) is a resultant condition in children born to drinking women during pregnancy. FAS constitutes the extreme case of the Fetal Alcohol Spectrum Disorder (FASD) spectrum.FASDs are all conditions that result from a mother drinking during the gestation period. FAS causes problems in the nervous system, growth problems, and minor alterations in facial features. Children born with FAS experience problems with attention span, communication, learning, vision, and memory. Victims have challenges learning and have trouble trying to get along with other people.

One specific area of interest is the challenges children with FAS face when learning mathematics. The children display evident deficits, especially in those moderate, possibly confounding variables and IQ. FASD conditions are mostly exposed to various mathematical components, including specific tests and standardized achievement measures. The condition occurs in children, adults, and adolescents. FAS’s outstanding character is that it causes difficulty in mathematical skills compared to other cognitive areas. The rate of mathematical cognition is directly proportional to the quantity of intrauterine alcohol exposure. New studies are aligned with investigating the co-relationship between white brain matter and understanding mathematics for FAS victims. One such study employed Diffusion Tensor Imaging (DTI) to determine the relationship between white matter structure and mathematical skills. The outcome revealed that the varietal area important in performing mathematical tasks, which is damaged due to prenatal alcohol intake, causes the discipline’s challenges.

The patient lobes also called the association cortex, provide a site for advanced thinking processes, various aspects of sensory information processing, including auditory and visual data, and cognitive processes (Cleversay, 2018). Processing of mathematical information is dependent on several skills such as spatial or visual skills, executive functioning, and the corpus callosum that facilitates the integration of facts in the two brain hemispheres. Past research has also revealed that mathematical processing is related to particular sections of the parietal lobes. However, various areas are seemingly related to diverse processes, including subtraction, addition, and other complex types of mathematics interconnected in a network. The findings expose a link between cognition and the brain’s structure, which gives an insight into how the brain of a victim of FAS works. The results also facilitate understanding of how mathematical processes occur for the more significant population, similar to past studies. Ultimately, an improved version of the inherent cause of the different cognitive deficits in the broader FASD may lead to a better quality of life and improved treatment.

The probability of FAS individuals’ academic success and general success can be increased if caregivers and educational service providers are more aware of its complexities. A study was carried out whose primary purpose was to identify services provided by caregivers of individuals with FAS disorder (Cleversay, 2018). The study aimed to determine whether these caregivers could assure the success of these individuals in schools. A sample group of sixteen caregivers was chosen to represent the enormous population in telephone interviews. The telephone interviews included a question, “What services would help youth be successful in school?” An efficient concept mapping technique was utilized where the individual participants grouped the answers provided. The grouped data were subjected to a critical analysis using the cluster analysis method, and in some cases, multidimensional scaling was employed. Six concepts surfaced from the question, including active participation in the child’s education, better accommodation, and provision of relevant resources, ensuring that educators are vast with knowledge about FASD, more receptive educators who are willing to listen to these individuals, a highly supportive knowledge base, and more understanding and support from the child’s parents and family members (Cleverday, 2018).

A second study was carried out whose study domain was the academic achievement of individuals consistent with prenatal alcohol exposure (PAE). The detection of errors, a vital arithmetic quality, can be evaluated in a mathematical verification undertaking (Ben-Shachar, 2020). Electroencephalographic (EEG) studies employing these undertakings have exposed outbursts of the-band behavior that happen uniformly in reaction to perceived errors. The behavior was monitored for individuals with intrauterine alcohol exposure and the typically developing matched controls. One would predict that the group exposed to intrauterine alcohol intake would display lesser outbursts in this experiment in the case of detection of an error and reduced responses depending on the magnitude of the error intensity.

The respondent’s mothers were also involved in this study, where they were questioned about the quantity and frequency of alcohol intake during pregnancy. The participant’s cases were followed up from birth to when they were diagnosed with FAS or partial FAS by a dysmorphologist. EEGs were apparent for forty-eight adolescents during a task that aimed to verify their conditions. The study required to separate incorrect solutions from the correct solutions to easy equations where wrong answers contained huge or tiny deviations from the right answers.

The results obtained included excellent performance from the control group, while the PAE group exhibited poor performance. The accuracy of the answers was inversely proportional to the severity of the diagnosis. The control group and the heavily exposed individuals showed the expected differentiation. The control group had higher theta-bursts in reaction to erroneous values, while the PAE group had lower theta-bursts. The extent of brain impairment due to prenatal alcohol exposure caused the PAE group’s poor response to errors. The lesser the reaction, the higher the severity of their diagnoses. The highly exposed individuals displayed a deficient level of discrepancy and only showed a response to significant errors. The experiment revealed that PAE favorably alters theta activities related to arithmetic error detection. The method can be used to separate exposed individuals and those individuals who have not been disclosed and within a diagnostic category, encouraging the utilization of quantitative and number related process patterns to obtain a neurocognitive profile that can potentially alleviate the process of diagnosis and overall treatment of FAS disorders (Ben-Shachar, 2020).

A final study evaluated children’s academic achievement with a severe case of prenatal alcohol exposure (Glass, 2017). The study was carried out to determine these individuals’ possible weaknesses and strengths. The study also investigated the utility of various definitions for distinguishing poor performance in academic work and to venture scholarly output. The method employed included a sample group of children aged between eight and sixteen years. The children were evaluated by utilizing WIAT-II. Their performance patterns were assessed in two separate subject categories. The two categories included those children who had experienced severe exposure to prenatal alcohol exposure were sixty-seven in number, and sixty-one controls were employed. A recurrent-measures examining group variations domain was carried out, including spelling, math, and reading. Children’s percentages and numbers were taken down for analysis (Glass, 2017). FreeSurfer v5.3 was used to analyze the obtained data and performance where the neutral correlates were evaluated. The results revealed that the individuals exposed to alcohol performed worse than the control samples. This was the case for all domains, including numbers. The alcohol-exposed group particularly experiences challenges in carrying out numerical operations. More than half of them displayed low achievement in all academic fields. The percentage and number of children achieving good marks was variant from group to group and from discipline to discipline. The imaging analysis revealed that the individuals exposed to prenatal alcohol were better at some fields, such as spelling than numbers. There was no positive correlation between the individuals’ performance and the various disciplines for the control group. In contrast, the individuals with FAS disorder showed a positive correlation between their performance and the type of field where numbers were the most significant challenge (Glass, 2017).

Conclusion

Mathematics is particularly a challenging field for individuals with FAS disorder. They are naturally characterized by a low cognition of mathematical errors but perform better in other disciplines. However, they can achieve more in their education and life with proper assistance. Educational services may assist individuals living with FAS disorders by providing the requirements for their academic success and general success in other fields of work. The workers may also receive proper training on handling cases of FAS to facilitate maximum intellectual output from these individuals. There is also a need for teachers, parents, and family to listen to these individuals and remain to understand their situation. The harmony will improve these individuals’ expression to their teachers for better academic and overall results.

References

Ben-Shachar, M. S., Shmueli, M., Jacobson, S. W., Meintjes, E. M., Molteno, C. D., Jacobson, J. L., & Berger, A. (2020). Prenatal alcohol exposure alters error detection during simple arithmetic processing: An electroencephalography study. Alcoholism: Clinical and Experimental Research, 44(1), 114–124.

Cleversey, K., Brown, J., & Kapasi, A. (2018). Educational services for youth with fetal alcohol spectrum disorder: Caregivers’ perspectives. International Journal of Mental Health and Addiction, 16(5), 1156–1173.

Glass, L., Moore, E. M., Akshoomoff, N., Jones, K. L., Riley, E. P., & Mattson, S. N. (2017). Academic difficulties in children with prenatal alcohol exposure: Presence, profile, and neural correlates. Alcoholism: Clinical and Experimental Research, 41(5), 1024–1034.