Experience Paper Review

Our bank offers services to everyone including students, business owners, civil servants, and employees from various companies. We serve institutions such as hospitals, schools, and organizations among others. Our bank offers services at friendly costs, allowing a cost effective solution for customers to save as much money as they can. The bank has also established a variety of branches throughout the country to ensure that customers can readily receive services without traveling long distances. The bank advises customers to open both savings account and checking accounts. Encouraging them to save and plan for the future. The latter ensures that account holders are liquid at all times and carry out transactions with few challenges. It is good for individuals with a surplus of money in their checking accounts to open savings accounts, this allows them to put their money to good use and not overspend.

The bank also provides different transfer services to customers, to ensure that clients do not have to withdraw money from their accounts to send it to another. They simply transfer the money from the comfort of their own home or office into the account of the person to whom payment is made. The same applies to all account holders such as hospitals, companies and schools. The client is allowed to transfer funds in order to pay for any service. The bank also has services for international students who come to study in the United States. We allow the students to make payment from their home accounts and provide the best exchange rates so that they too can save some money. The bank helps customers choose the account that matches their needs. We encourage our clients to research and compare fees and rates of other banks in order to make informed decisions. This is done by paying close attention to the cost of service and the monthly charges. Every account must have a minimum balance, so every client should put this into consideration. They are also advised on how long it takes for the bank to clear a check that is the amount of time it takes between the check deposits and when the account holder is allowed to withdraw or use the money.

There are several things that people need to open an account with us, they include: full name, home address, home telephone number, cell phone number, citizenship ID. Immigrants are required to have an I-94 card, I-20, I-797 or DS-2019 and an unexpired passport. Our bank, just like many others in the United States is going through structural development, a phase that most countries went through years ago. The American Constitution allows the state and federal government to make laws that regulate banking. Our bank, for instance, is a subject of the state’s legislature and of the federal congress. Our state does not allow branch banking, so all of the banks within the state practice unit banking. The initial establishment of many banks in the US was to provide profitable opportunities for investment. Our bank was founded during that time, our bank was built upon those same principles, to satisfy the high demand for loans and medium exchange. Communication was a major challenge at the time of the bank being founded and formed. It was only after the construction of railroads that traffic expanded.

Banks are expected to hold liquid assets in forms that can easily be converted to cash. This helps the bank maintain its customers’ confidence. This confidence is the bank’s basis for credit. As long as the bank’s promises are honored, it is able to create credit to be used by its customers. Woodforest National Bank honors its promises without question and our customers are confident and trust our ability to continue the banking legacy. Over the years, these promises have remained outstanding, I do not remember any time that a customer questioned the bank for not keeping its promise. The bank’s promises are seen as claims against it and can be transferred from one account holder to another. This kind of banking is known as deposit banking, which is the accepted basis for commercial banking that is practiced in the contemporary world. However, deposit banking does not exist when the assets held by the bank consist of cash lodged by depositors. When the accounts start to show less cash and more deposits, part of them represent the loans made by the banker to his clients, which means the deposits made by the banking system.

The Central Bank of the United States is the Federal Reserve. The system came to existence in the year 1913 after the government passed the Federal Reserve Act, in response to the bank panic of 1907. Since the establishment of the reserve, Congress has passed additional laws reinforcing or altering the responsibilities and powers of the Federal Reserve System. Some of these include the Glass-Steagall Act, the Federal Reserve Reform Act, the Bank Holding Company Act, the Dodd-Frank Act, and the Gramm-Leach-Bliley Act. The aim of the Federal Reserve is to ensure that the banks work within the required money holding requirements, it has been granted powers by the Congress to regulate the budgetary wellbeing of America. The Fed can make changes intended to keep the economy running easily through instruments such as the fiscal strategy. Given these forces, the instruments meet the criteria required to control accounts under the Basel Core Principles with an intention to regulate establishments that fall under the administration of the United States.

The Fed is the means by which the US conducts monetary policies. This takes place under a Federal Reserve body popularly known as the Federal Open Market Committee (FOMC). The Fed can alter money supply through free market operations, which entails the buying and selling of government securities. When the Federal Reserve desires to increase money supply in an economy, it goes into the market where it buys bonds from the banks. The banks are then required to lend the cash. On the other side, the Fed sells bonds to the banks and drains money from the country’s economy. The Fed can also change the banks’ reserve requirements. Since money is tied to the amount that banks hold as reserves, an increase in the reserve rates results in a decrease in money supply. Banks may not always loan out the maximum amount that they are allowed. Besides, alteration to the reserve requirements is likely to create instability in the banking sector. Finally, the Fed can impact the money supply through interest rates. The Fed does not directly charge how much individual borrowers pay for a new car loan or a mortgage, but interest rates flow from what the Fed charges. If the Fed raises rates, they flow down through all the levels of banking and eventually result in higher lending rates, as well as less lending activity.

The Fed fiscal policy seeks to facilitate the utilization of government tax assessment, its spending and acquiring in order to fulfill macroeconomic objectives. Since the Great Depression, government spending has increased steadily over the years. The spending rose as a share of the GD in the years that followed, calling for the development of the fiscal policy. The president proposes a budget to the Congress, which lawmakers consider in several steps. First, they make a decision concerning the spending level, divide the overall figure in several steps, and then the congress consider individual bills, which spells out how the money in each category should be spent. The fiscal policy has undergone various changes since the 1930s. This is because the government had viewed it, not only as a spending regulator, but also as a promoter of the United States overall growth and development. Politicians proposed ideas on how to improve the policy since most citizens did not have the purchasing power to acquire most of the products that the businesses offered. Major companies had to close down due to bankruptcy. Soon, the Congress realized that some ideas did not help improve the state of the economy.

By the 1990s, Congress realized that it would not benefit the economy to use the fiscal policy to achieve general economic goal. They sought to reduce taxes on capital gains in order to increase wealth from the appreciating value of assets such as stocks and property. The budget shrunk and the Congress sought to impact the economy through educational training programs in order to develop a high-skilled, competitive and more productive labor force.

Interest is the charge for borrowed money, banks are able to make money from the loans given to account holders. The banks can do this since the interest charged on loans is greater than the interest deposited into the customers’ accounts. The specific interest rates for the bank depend on various factors, which include the amount of money that the bank has to lend and the number of people who want to borrow. The amount also depend upon the reserve requirement that has been set by the Federal Reserve. The amount may also be dependent on the fund rates, which are the interest rates which banks charge each other for short term loans to meet the reserve requirements. Loaning money, however, can be risky for banks so they charge greater interest rates for riskier loans.

Throughout history, free markets societies go through boom and bust cycles. While most people enjoy favorable economic times, the shocks are very painful. The Fed was created to help reduce the injuries inflicted upon citizens during such times and holds some powerful tools, which affect money supply. The Fed has grown over the years and today, it manages the banks’ growth and money supply in order to allow stability and expansion of the economy. The Fed uses three main tools to change ban reserves, these include: a change in the reserve requirements, discount rates, and open market operations. The reserve requirements are the amount of funds that the banks must hold in reserve against deposits made by the customers. The discount rate refers to the interest rate used by the bank in Discounted Cash flow (DCF) analysis to determine the present value of cash flows in future. The DCF takes into account the time value of money and the risk of uncertainty in future cashflows. The greater the uncertainty of future cash flow the higher the discount rate. Finally, the Open Markets Operations as mentioned above represents the purchase and selling of government securities in the open market to expand or contract the amount of money in the banking system.

As an individual working in the banking system, I think the US system is not as complicated as many people may perceive it to be. Money supply is determined by the Federal Reserve, which is America’s Central Bank. When the amount in circulation is too low, the Fed is trying to boost the economy and when it is high, inflation becomes a challenge. It has taken many years to make the banking system what it is today. The policymakers have had to try different policies in order to come up with one that works for the United States. I work in the instore location of a retail bank. Over the years, I have seen how the bank works to provide loans as well as service to many customers. When the Fed was established, the founders did not desire to pursue active monetary policy in order to stabilize the economy. Besides, the ideas for an economic stabilization policy were alien at the time. Instead, the founders viewed the Fed as a means to prevent money supplies and credit from drying up during economic downfalls such as the pre-1914 period. I have come to learn that one of the key ways that the Fed is used to protect against financial panics was to act as the lender of the last option. It helps insure citizens against economic shock. When risky business prospects make banks hesitant to extend new loans the Fed steps in by lending money to banks, this stimulates the banks to want to lend more money to customers.