12 Digital Vision/Getty Images Banking and the Federal Reserve System Learning Outcomes By the end of this chapter, you will be able to: Summarize…

HELLO!  I need a suitable response to my fellow student’s response to the discussion question below.  Please – a MUST HAVE is that there is a citation from one of the attached chapters.  I can’t just say it’s a good response (which it is) but offer some form of feedback.  Challenging for me, but please help.

(ref Nieshia)

From 2007-2010, the Federal Reserve Bank (the Fed) used many practices that had never before been seen from the central bank of the United States.

Discuss the some of the actions that the Fed took during this period.  Such as:

  • How the Federal Reserve’s lending practices changed during this period. 
  • What did the Federal Reserve do to support firms deemed “too big to fail.” 

Do you believe these actions were necessary to avoid a collapse in the financial system?  Support your opinion with information from the textbook or external source(s).

Reference: Chapter 12, section 12.4: Bank Failures During the Great Recession, Chapter 14, section 14.4: Monetary Policy in the 2000s, and Conclusions section at the end of the Chapter 14

STUDENT RESPONSE

The Federal Reserve Bank (the Fed) has many functions, but one of the main ones is to provide bank safety. During the Great Recession of 2007-2009 the Fed had to intercede to prevent the complete collapse of the banking system. During this time the economy suffered from failed bank assets, because of the savings and loan crisis. Many changes to the system were needed to prevent this from happening again. Amacher and Pate write “These changes were made in an effort to provide stability to the U.S. banking system and encourage greater consumer confidence. First, all accounts that do not earn interest are insured in full, regardless of the balance. Those accounts that earn interest are still covered under the standard regulations for bank accounts” (2012, Sec 12.4).  Many people were losing confidence in the banks and in the banking system, I know of several people who pulled their money out claiming that if there was a complete collapse of the economy the Federal Government would come in and take away all of your funds. I don’t know if this would have happened or not, but some people believed that it could.  Another change in the banking system was due to the theory or belief that some companies or corporations are too big to fail. This theory or belief was proven to be wrong, and the evidence was seen with the downfall of large corporations like Fannie Mae and Freddie Mac. Another chance that was made in response to the Great Recession was the signing into law on July 21, 2010 of the Dodd-Frank Wall Street Reform and Consumer Protection Act by President Barack Obama; which permanently raises the current standard maximum deposit insurance amount (SMDIA) to $250,000 (Amacher and Pate, 2012). I believe that the actions taken were probably the right actions at the time to avoid further collapse. To what extent I don’t know for sure, but some policies and laws needed to change and change fast. One of Obama’s economic advisers said in her commencement speech, A key difference between the financial crisis of the 1930s and the recent crisis was the response of the Federal Reserve. In the early 1930s, the Federal Reserve stood idly by and allowed banking panics to go unchecked. The result was widespread bank failures and devastating declines in the money supply. In the fall of 2008, the Federal Reserve and other financial policymakers responded aggressively to the financial crisis, taking crucial measures to provide liquidity, reassure depositors, and maintain key lending flows. Over those terrifying months following the collapse of Lehman Brothers, the Federal Reserve made the difference between hanging at the edge of a cliff and falling to the bottom of the ravine (College of William and Mary Commencement Address, 2010). References  Amacher, R., & Pate, J. (2012). Principles of Macroeconomics. Available from https://content.ashford.edu/print/AUECO203.13.1?sections=front_matCouncil of Economic Advisers (Producer). (2010). New Policies for a New Century: Recent Economic Actions through the Lens of the New Deal [speech]. Retrieved from http://www.whitehouse.gov/administration/eop/cea/speeches-testimony/new_policies_for…







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10