bài tập nhóm the structure of central bank

The Federal Reserve System is composed of three main branches: 12 regional Federal Reserve Banks, the Board of Governors, and the Federal Open Market Committee.In addition, there are adv

DUY TAN UNIVERSITY 1 Nguyễn Minh Nghi 2 Nguyễn Phan Hoàng Long

ĐẠI HỌC DUY TÂNPHIẾU CHẤM ĐIỂM ĐỒ ÁN MÔN HỌCTRƯỜNG ĐÀO TẠO QUỐC

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MÔN: NHẬP MÔN TÀI CHÍNH TIỀN TỆ 2

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THE STRUCTURE OF CENTRAL BANK

Giảng viên: Hoàng Anh Thư

Họ và tên Sinh viên 1: Thái Đăng Hoàng Dương – MSSV: 28214830367

Họ và tên Sinh viên 2: Nguyễn Phan Hoàng Long – MSSV: 28219448506

Họ và tên Sinh viên 3: Nguyễn Minh Nghi – MSSV: 28209436377

Họ và tên Sinh viên 4: Đỗ Đình Nguyên – MSSV: 28214202457

BẢNG TỰ ĐÁNH GIÁ

THE STRUCTURE OF CENTRAL BANK

1 THE STRUCTURE OF THE FEDERAL RESERVE SYSTEM

The Federal Reserve System is composed of three main branches: 12 regional Federal Reserve Banks, the Board of Governors, and the Federal Open Market Committee.

In addition, there are advisory committees and member banks.

This complex structure disperses power to prevent centralization, similar to the checks and balances of the U.S government.

All national banks are required to be members of the Fed, while state banks have the option to join (though most do not because of historical cost differences that no longer exist).

The Fenderal Reserve

The Federal Reserve Bank of New York, located in the heart of Wall Street, is the

largest among the 12 Federal Reserve Banks and houses the world's biggest gold vault It serves as both the government's bank and the bankers' bank, performing vital functions like:

Issuing new currency and managing the US Treasury's account for the government.

Holding deposits, operating a payment network, and providing funds to commercial banks through discount loans for bankers.

Supervising and regulating financial institutions in the district to ensure their safety and soundness.

Providing services to foreign central banks and

managing financial market activities like Treasury securities auctions and foreign exchange trading.

Playing a role in formulating monetary policy through its representatives on the FOMC, which sets interest rates and manages the Fed's balance sheet.

The Structure and Policy Organization of the Federal Reserve System

The board of the governos

The Federal Reserve Board (FRB) sits in Washington D.C and governs the entire Federal Reserve System.

Its 7 Governors, appointed for 14-year terms, are chosen to represent various financial and economic interests.

Their main duties include setting reserve requirements, approving interest rates, supervising banks, regulating the financial system, analyzing economic conditions, and collecting data.

The Board lacks its own staff and relies on directors of various departments for support.

The Federal Open Market Committee

The Federal Open Market Committee (FOMC) controls the key interest rate (federal funds rate) by buying and selling securities in the financial markets.

The FOMC has 12 voting members, including the 7 Board of Governors and 5 rotating Reserve Bank presidents (plus the president of the New York Fed who always votes).

The FOMC meets 8 times a year and releases a policy statement after each meeting, explaining its decisions.

The chair of the Fed is the most powerful member of the FOMC and plays a key role in shaping policy.

The Tealbook, prepared by the Board staff, is the most important information distributed to members before the meeting.

While the chair is powerful, the committee structure provides checks and balances on their power.

Assessing the Federal Reserve System’s Structure

Independence from Political Influence:

The Federal Reserve meets the criteria for central bank independence: it controls its own budget, interest-rate changes are irreversible, and officials have long terms in office.

Despite its structural independence, the Fed faces occasional political pressure, particularly when raising interest rates or during financial crises.

The Dodd-Frank Act of 2010 introduced some changes, curtailing emergency lending powers but also expanding supervisory responsibility.

Congressional critics have proposed bills that would further limit the Fed's independence, but none have been successful as of 2016.

Decision Making by Committee

The Federal Reserve (Fed) makes decisions by committee through the Federal Open Market Committee (FOMC).

Although the chair of the Board of Governors holds significant influence, the presence of 12 voting members prevents any single individual from dictating policy.

This committee structure protects against arbitrary decisions and ensures a more balanced and considered approach to policy making.

Accountability and Transparency

The Federal Open Market Committee (FOMC) releases extensive information to the public.

Before meetings, they publish the Beige Book, and after, they announce decisions and reasoning in a statement, minutes, and eventually transcripts.

The Fed Chair holds press conferences and testimonies, along with public speeches by FOMC members.

Some information, like staff forecasts and policy options, is only released after five years.

While this transparency seems sufficient, the Fed lacks a published consensus economic/interest-rate projection and delays some data releases.

However, a recent shift to inflation targeting has improved the focus and effectiveness of Fed communications.

Policy Framework

The US Congress set vague objectives for the Federal Reserve: promoting "maximum employment, stable prices, and moderate long-term interest rates."

This ambiguity was initially used by the Fed to have flexibility in setting their own goals.

In 2012, the Fed adopted a more transparent, inflation-targeting approach, similar to other central banks.

Inflation targeting involves aiming for a specific long-term inflation rate (2% in this case) and adjusting policies to keep inflation close to that target.

The Fed doesn't set specific goals for employment or economic growth as they cannot directly control these.

If there's a conflict between the inflation target and the optimal employment level, the Fed will balance both goals in a "balanced approach".

2 THE EUROPEAN OF CENTRAL BANKOrganizational Structure Of ECB

a Executive Board of the European Central Bank

The Executive Board consists of the President, the Vice-President, and four other members.

Executive Board members serve eight-year terms (without the possibility of reappointment), and member nations must appoint their central bank governors for a minimum of five years.

b The independence of European Central Bank (ECB)

The ECB's financial interests must remain separate from any political organization.

The Governing Council cannot take instructions from any government, so its policy decisions are irreversible.

The ECB is the product of a treaty agreed to by all European Union countries, making it challenging to change its operational terms.

2.1 The ECB's role and tasks.

The primary objective of the ECB is to maintain price stability within the Eurozone The ECB aims to keep inflation rates below, but close to, 2% over the medium term It formulates and implements monetary policy to achieve this objective

The ECB is responsible for issuing the euro banknotes It works alongside the national central banks of the Eurozone countries to ensure the proper circulation and management of euro banknotes and coins.

The ECB conducts foreign exchange operations to manage the euro's exchange rate against other currencies While the ECB's primary focus is on domestic price

stability, it also considers the impact of exchange rate movements on the eurozone economy.

The ECB, in collaboration with national supervisory authorities, oversees the prudential supervision of significant banks within the Eurozone This is part of the Single Supervisory Mechanism (SSM) established to ensure the stability of the European banking system.

The ECB monitors and assesses the overall stability of the financial system in the Eurozone It plays a role in identifying and addressing risks that could impact the stability of the financial markets.

The ECB promotes the smooth functioning of payment systems and financial market infrastructure within the Eurozone.

3 THE STATE BANK OF VIET NAM Introduction

The State Bank of Vietnam is a government agency and the central bank of the Socialist Republic of Vietnam It carries out the state management functions on currency, banking, and foreign exchange In addition, it performs the functions of the central bank in issuing banknotes for credit institutions and providing monetary services to the government.

Overview of the State Bank of Vietnam

It is the bank responsible for issuing currency.

It is the regulatory and supervisory authority for the banking currency.

It functions as the comprehensive financial machinery.

The establishment process of the State Bank of Vietnam.

Before 1945: The Đông Dương Bank was the exclusive currency-issuing bank.

May 6, 1951: Establishment of the National Bank of Vietnam.

January 1960: Renamed as the State Bank of Vietnam, and it has retained this name since then.

The organizational model of the State Bank of Vietnam

5,

The role of the central bank of Vietnam

Supervising and implementing the national monetary policy.

Managing and overseeing the banking system, regulating the operations of credit institutions, and addressing other financial and monetary issues.

Controlling inflation and safeguarding the national currency to support socio-economic development activities and contribute to the socio-economic stability of the country.