Free The Constitution and the Federal Reserve System Essay Sample
|← Logistic||Convergence of GAAP and IFRS →|
Buy Cheap The Constitution and the Federal Reserve System Essay
Expression is a freedom yet it has limitation. It is similar to a government empowered with law and order. The law provides autonomy but has its restrictions, a sense of balance between the two. A country without system is like a house without foundation, without stability, it will collapse. The system of check and balance, like a base of a house, has been the layout of the constitution. The constitution has reproduced an offspring, in its image, the Federal Reserve.
The Federal Reserve System had managed its way to be a central banking system. The Federal Reserve at present is composed of the Board of Governors, Federal Market Committee, Reserve Banks, Member Banks, Other Depository Institution and American People (Federal Reserve Bank of Richmond, 2009, p.5). The system had worked in this manner; American People were customers of the member banks. The people elected leaders, president and senate, who selected seven members to the Board of Governors as well as its chairman and vice chairman.
The Board of Governors has administrative power over the twelve Reserve Banks; the latter's four presidents together with seven members of the Board of Governors serves to Federal Market Committee (Federal Reserve Bank of Richmond, 2009, p.5). Furthermore, the Federal Reserve of Richmond (2009, p.10) signifies that the Federal Market Committee set the monetary standard to provide employment for American People.
There are indeed much resemblance between the constitution and the Federal Reserve System. It was designed under the principle of checks and balances. For instance, the power of the Board of Governors is similar to the Executive branch of the constitution. Furthermore, the legislative branch has delegated Federal Reserve Board of Governors to implement certain laws such as bank privacy laws (Federal Reserve Bank of Richmond, 2009, p.32).
The establishment of Federal Reserve System in historical perspective was influenced by the constitution although it did not clearly mention that it was patterned to the latter. The important thing is both should carry out each purpose for the benefit of the American People. The government is made by the people therefore it should protect the people it serves.