Which of these is a banking activity of the Fed?

Which of these is a banking activity of the Fed?

a. printing money

b. regulating securities markets

c. storing money for banks

d. funding government programs

Answer: c. storing money for banks

The Federal Reserve System also commonly known as the Fed is the central banking system of the United States.

Among its roles is the role of being a bank to the commercial banks which entails holding the reserves and deposits of the commercial banks. Thus, by controlling some of the banks’ reserves, the Fed can regulate the money supply and interest rates through different monetary tools. Some other activities of the Fed are; printing of currency- This is an option a function and the Fed shares this with the U.S. Treasury. The issuance and trade of securities (option b) is another control activity that comes under the authority of bodies such as the SEC. Federal budget and tax policies (option d) involve funding government programs which are the duty of the executive and the legislative branches.