Theresa is the manager of Ascot Bank, a locally bank in her hometown. In addition to managing relationships with her employees a
nd local customers, she has a good relationship with the bank examiner who frequently visits the bank to look at the accounts. The examiner ensures that Theresa’s bank is not making too many or too few loans and is keeping the right amount of cash reserves in the bank vault. The examiner also wants to make sure that the computers that link her bank with the central bank are functioning properly so the bank deposits people’s checks into the proper accounts worldwide. The computer also informs her of any changes in the interest rate the Federal Reserve sets. What interactions do you see between the local bank and the Federal Reserve?
In this case, the local bank will be responsible for any and all policies that the Federal Reserve establishes in relation to cash reserves, as well as in relation to the activities of check release procedures and the interest rates that accompany them.
Explanation:
In the case shown in the question above, it is necessary for Theresa to inquire and know what interactions are needed between the local bank and the Federal Reserve must be established in order for her plans to work out. When looking for information, Theresa will see that the local bank must comply with all policies, guidelines and rules that the Federal Reverses establishes on cash reserves, the release of checks and interest rates related to these activities.
