The central federal banking system that regulates and provides services to member commercial banks, and is responsible for conducting federal monetary policy.
Monetary policy refers to the actions of a central bank or other regulatory authorities that determine the size and rate of growth of the money supply, which in turn affects interest rates. It is a crucial tool for achieving economic objectives such as controlling inflation, managing employment levels, and maintaining financial market stability.
The rediscount rate is the interest rate charged to commercial banks and other financial institutions for borrowing funds from the Federal Reserve's discount window. It plays a crucial role in monetary policy and financial regulation.
Tight money is a condition of the credit markets characterized by high interest rates, rigid underwriting standards, and scarcity of high loan-to-value loans. In such environments, it becomes more difficult for individuals and businesses to obtain financing.
