One of the 12 banks that, with their braches, make up the Federal Reserve System. The twelve banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco. The role of each member Bank is to monitor the commercial and savings banks in its region to ensure that they follow Federal Reserve regulations and to provide those banks with access to emergency funds.
This committee sets short-term monetary policy for the Federal Reserve. The committee comprises the seven Federal Reserve governors and the presidents of six Federal Reserve Banks.
Governing board of the Federal Reserve System. Its seven members are appointed by the President of the United States, subject to Senate confirmation, and serve 14-year terms. This Board is responsible for establishing policies on reserve requirements and other bank regulations, sets discount rate and tightens or eases the availability of credit.
Federal Reserve System ruling mandating the financial assets that member banks must keep in the form of cash and other liquid assets as a percentage of Demand Deposits and Time Deposits.
The regulation of the money supply and interest rates in order to control inflation and stabilize currency.
The interest rate at which a depository institution lends immediately available funds from its balances at a Federal Reserve Bank to another depository institution overnight.
The interest rate that the Federal Reserve charges member banks for loans, using government securities or eligible paper as collateral. This provides a floor on interest rates, since banks set their loan rates a notch above the discount rate.
Interest rate banks charge to their most creditworthy customers. The rate is determined by the market forces affecting a bank's cost of funds and the rates that borrowers will accept. The rate is a key interest rate, since loans to less-creditworthy customers are often tied to the prime rate.
The smallest measure used in quoting yields on bonds and notes. One basis point is 0.01% of yield. Thus, a bond's yield that changed from 4.00% to 4.05% would be said to have increased by five basis points.
The weighted average maturity of the security's cash flows, where the present values of the cash flows serve as the weights. The greater the duration of a security, the greater its percentage price volatility.
A graph showing the term structure of interest rates by plotting the yields of all bonds of the same quality with maturities ranging from the shortest to the longest available. The resulting curve illustrates if short-term interest rates are higher or lower than long-term rates. If short-term rates are lower and increase with maturity, it is referred to as a positively sloped yield curve. If short-term rates are higher than long-term rates, it is known as an inverted yield curve. A flat yield curve occurs when short and long-term rates are roughly equal.
The rate that the most creditworthy international banks dealing in Eurodollars charge each other for large loans.
An annual meeting of the seven industrialized countries. Comprised of the United States, Japan, Germany, France, Canada, Italy, and the United Kingdom. G7 meetings are held to discuss and negotiate international trade and monetary policy.