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| [F] Federal Reserve notes Nearly all of the nation's circulating paper currency consists of Federal Reserve notes printed by the Bureau of Engraving and Printing and issued to the Federal Reserve Banks to put into circulation through commercial banks and other depository institutions. Federal Reserve notes are obligations of the U.S. government. Federal Reserve System The central bank of the United States, created by Congress and made up of a seven-member Board of Governors in Washington, DC, twelve regional Federal Reserve Banks, and their twenty-five Branches. Fedwire Electronic funds transfer network operated by the Federal Reserve. Fedwire is usually used to transfer large amounts of funds and U.S. government securities from one institution's account at the Federal Reserve to another institution's account. It is also used by the U.S. Department of the Treasury and other federal agencies to collect and disburse funds. fiat money Money that has little or no intrinsic value as a commodity; it is costless to produce, usually taking the form of tokens or pieces of paper, and is not redeemable for any commodity. finance charge The total dollar amount paid to obtain credit. finance lease See open-end lease. financial institution An institution that uses its funds chiefly to purchase financial assets (loans, securities) as opposed to tangible property. Financial institutions can be classified according to the nature of the principal claims they issue. See also depository institution. financial instrument Any written instrument having monetary value or evidencing a monetary transaction. fiscal agency services Services performed by the Federal Reserve Banks on behalf of the U.S. government. These include maintaining deposit accounts for the Treasury Department, paying U.S. government checks drawn on the Treasury, and issuing and redeeming savings bonds and other government securities. fiscal policy The federal government's decisions about the amount of money it spends and collects in taxes to achieve a full employment and non-inflationary economy. See also contractionary fiscal policy and expansional fiscal policy. fixed exchange rate system Exchange rates between currencies that are set at predetermined levels and don't move in response to changes in supply and demand. fixed rate A traditional approach to determining the finance charge payable on an extension of credit. A predetermined and certain rate of interest is applied to the principal. See also variable rate. floating exchange rate system The flexible exchange rate system in which the exchange rate is determined by the market forces of supply and demand without intervention. foreign currency operations Purchase or sale of the currencies of other nations by a central bank for the purpose of influencing foreign exchange rates or maintaining orderly foreign exchange markets. Also called foreign-exchange market intervention. |
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