FUNCTIONS OF THE FED 81

4-1 Overview, 81 4-2 Organizational Structure of the Fed, 81

4-2a Federal Reserve District Banks, 82 4-2b Member Banks, 82 4-2c Board of Governors, 82 4-2d Federal Open Market Committee, 84 4-2e Advisory Committees, 84 4-2f Integration of Federal Reserve Components, 84 4-2g Consumer Financial Protection Bureau, 84

4-3 How the Fed Controls Money Supply, 84 4-3a Open Market Operations, 85 4-3b Role of the Fed’s Trading Desk, 88 4-3c How Fed Operations Affect All Interest Rates, 90 4-3d Adjusting the Reserve Requirement Ratio, 91 4-3e Adjusting the Fed’s Loan Rate, 92

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4-4 The Fed’s Intervention during the Credit Crisis, 93 4-4a Fed Loans to Facilitate Rescue of Bear Stearns, 94 4-4b Fed Purchases of Mortgage-Backed Securities, 94 4-4c Fed’s Purchase of Bonds Backed by Loans, 94 4-4d Fed’s Purchase of Commercial Paper, 94 4-4e Fed’s Purchase of Long-term Treasury Securities, 95 4-4f Perception of Fed Intervention During the Crisis, 95

4-5 Global Monetary Policy, 96 4-5a A Single Eurozone Monetary Policy, 96 4-5b Global Central Bank Coordination, 97