Question

What role does the Federal Reserve play? Check all that apply.

Regulate the banking industry
Loan money to banks
Give individual loans
Give corporate loans
Transfers any profits to the Treasury
Mark this and return

Answer 1

Select the following as applies:

- Regulate the banking industry — Yes. The Fed supervises and regulates many banks and bank holding companies.
- Loan money to banks — Yes. The Fed lends to banks (e.g., the discount window) as lender of last resort.
- Give individual loans — No. The Fed does not make loans to individual consumers.
- Give corporate loans — No (generally). The Fed does not make ordinary loans to corporations; only in rare emergency situations has it established facilities to support corporate credit through intermediaries.
- Transfers any profits to the Treasury — Yes. After expenses and dividends, the Fed remits its net earnings to the U.S. Treasury.