Money and Banking
Question: Is our system of fiat money and fractional reserve banking right for the United States?
Question 2: Granting that our banking and financial system contributed significantly to the current recession and credit crisis, should the Federal government impose strict regulations and restrictions on future banking activities?
The early 1900s - starting with the creation of the Federal Reserve System, and followed by major changes undertaken in the Great Depression - significantly changed and opened up our banking and monetary system in this country. As political and social winds have shifted over the decades our policies have favored either more regulation of the financial sector or less. Public sentiment, at the moment, seems to favor more. We will explore the foundations of our money system, take a look at basic banking behavior, and learn how the Federal Reserve uses monetary policy to influence the economy. All in 90 minutes!
Economic Concepts We Will Cover
- Functions of Money
- Fiat versus asset-backed money
- Fractional reserve banking
- Organization and role of the Federal Reserve System
- Monetary Policy
Resources for More Information
- Federal Reserve Bank - Fed 101 Tutorial for Students
- Federal Reserve Bank - Monetary Policy
- Federal Reserve "Beige Book" of Current Economic Conditions
- "The Creature from Jekyll Island" - G. Edward Griffin - not a big fan of the Fed (to say the least)
- Greenback by Jason Goodwin - Entertaining book on the history of money and the American Dollar