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Chapter 5 Federal Reserve System
how member banks use personal customer information that is not publicly
available. Many regulations are issued to implement laws passed by
Congress that affect the banking industry.
In addition to making regulations, the Fed supervises its member
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audits of member banks. The Fed also uses software to screen the
activities of member banks for negative trends and possible problems.
Financial Services
The Federal Reserve provides several services to its member banks.
In addition to providing short-term loans to banks as discussed above,
Federal Reserve Banks offer services:
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transfer funds between them
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into a bank account and automatic payment of some bills, such as a
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The Fed provides necessary services to the US government as well.
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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
2
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6
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10
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14
Prime Rate
Discount Rate
Figure 5-4.
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