Does the Federal Reserve conducts check-clearing services for all banks in the country.

Question

Carlos Hopkins

Business

3 October, 11:34

Does the Federal Reserve conducts check-clearing services for all banks in the country.

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Answers (1)

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Francis Savage · Answer 1

No. The federal reserve does not conduct check-clearing services for all banks in the country.

Explanation:

The Federal Reserve Banks are the latest organizations by the US to act as a central bank. The federal Reserve bank was created by the Federal Act of 1913. They were originally twelve banks in number with each bank situated in the twelve reserve districts. They are as follows; Federal Reserve Banks of Chicago, Atlanta, Boston, New York, Philadelphia, Cleveland, Richmond, St. Louis, Minneapolis, Kansas City, Dallas and San-Francisco.

The functions of the federal banks are as shown;

1. Acts as a place where the bank reserves can be deposited

2. Loaning to banks to cover momentary reserve deficiencies, regular business cycles, or exceptional liquidity requests.

3. Payments between banks are also collected and cleared by the federal reserve.

4. Giving cash to banks for circulation in place of currency.

5. Controlling the deposit accounts of the government.

6. They have an obligation to carry out auctions on federal debt.

The federal Reserve is not mandated to perform any check-clearing services for all banks in the country.