BANKS

When you "save" money, you want:
1. Safety
2. Return
3. Access

When you "borrow" money, you have or want:
1. Risk
2. Low Rates
3. Time (to pay back / low payments)

A Bank, Savings & Loan, or Credit Union is called a DEPOSITORY
because it takes deposits.

FEDERAL RESERVE

Our district of the Federal Reserve uses more coins than anywhere else in
the country -- because no where in the mid-west can you go w/out finding
homes w/ jars of money. Everywhere else in the country spends their
coins.

Only paper money is legal tender. Coins are not!

1913: Woodrow Wilson signs Federal Reserve Act and sets up the
Federal Reserve system.

THE JOB OF THE FED

3 things they have to do:

1. it is the government's bank
-created to eliminate political graft ("pet banks")
- collects checks and issues paper
2. acts as a supervisor and regulator
-makes sure banks are doing what they're supposed to be doing
-consumer protection:
a. made "apr" formula that all banks must use
b. also "apy" (yield) formula for interest on a savings vehicle
c. makes sure banks keep reserves
3. Monetary Policy
- insures banks have enough reserves to make loans
- Fed is bank of last resort (in case there's a run)
"lender of last resort"