Question

All of the following are functions of the Federal Reserve Board EXCEPT: A .acting as fiscal agent for the U.S. Treasury B. auditing commercial banks for compliance with banking and MSRB regulations C. lending funds to member banks through the discount window D. setting margins on municipal securities

Answer 1

Answer: Option (D). Setting margins on municipal securities.

Explanation: Setting margins on municipal securities is not a function of federal reserve. The federal reserve can set margins for corporate stocks, bonds, with the exemption of securities.

Federal reserve system which is often referred to as “The Fed” is the central banking system of the United States of America. “The fed” was created by the congress to provide the nation with a safer , more flexible and more stable monetary financial system. Federal reserve board is charged with overseeing of the 12 district reserve banks and setting national monetary policy. It also oversee and regulate the United States banking system.