The Federal Reserve System, What is it? ... The Federal Reserve System is the central bank of the United States. ... Also, each member bank is required to buy stock in its district Federal Reserve Bank. ... The discount rate is the rate of interest that the Federal Reserve Bank charges other banks when banks borrow from them. ... The main reason the Fed buys federal securities from banks is to increase excess reserves and to decrease federal securities held by banks. ...

• Word Count: 1833
• Approx Pages: 7
• Grade Level: High School