Text 2. Be ready to discuss the text

The Federal Reserve System

The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907. Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved. Events such as the Great Depression were major factors leading to changes in the system. The primary motivation for creating the Federal Reserve System was to address banking panics. Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes" Before the founding of the Federal Reserve, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has broader responsibilities than only ensuring the stability of the financial system.

Current functions of the Federal Reserve System include:

• To address the problem of banking panics
• To serve as the central bank for the United States
• To strike a balance between private interests of banks and the centralized responsibility of government
• To supervise and regulate banking institutions
• To protect the credit rights of consumers
• To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of
• maximum employment
• stable prices, including prevention of either inflation or deflation
• moderate long-term interest rates
• To maintain the stability of the financial system and contain systemic risk in financial markets
• To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
• To facilitate the exchange of payments among regions
• To respond to local liquidity needs
• To strengthen U.S. standing in the world economy

Ex.3. Do the quiz individually. Then compare answers with a partner.

1.If you go for a meal with someone you don’t know well, do you

a) offer to pay the whole bill?

b) suggest dividing the bill into equal parts?

c) offer to pay the whole bill but expect them to pay next time?

d) try to avoid paying anything?

2.What do you think about people who do not pay the correct amount of tax? Is this

a) a serious crime?

b) morally wrong but not a crime?

c) excellent business practice?

3.If you lend a colleague a small amount of money and they forgot to pay it back, do you

a) say nothing?

b) remind them that they owe you maney?

c) arrange to go for a drink with them and say you’ve forgotten your wallet or purse?