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US Financial Government Agencies and Institutions Research Paper


Introduction

It is the prerogative of the United States government to ensure that financial activities benefit the country from an economic perspective. The government of the United States has for a long time used the services of the Federal Reserve in managing the country’s financial affairs. However, the Federal Reserve operates under the mandate of the Department of the Treasury (Lambert and Kristin 567). As indicated earlier, other critical agencies such as the Securities and Exchange Commission (SEC), the Federal deposit Insurance Corporation (FDIC), Consumer Financial Protection Bureau (CFPB) and National Credit Union Administration (NCUA) have different functions associated with the country’s financial situation.

There are other institutions mandated with regulation, supervision and oversight over financial activities. In this context, political factions such as the House of Representatives Committee on Financial Services and United States Senate Committee on Finance assume the regulation, supervision and oversight functions. The International Monetary Fund (IMF) and the World Bank plays a crucial role that affects the country’s financial stability. Therefore, this research paper conducts an in-depth analysis of the United States financial government agencies and institutions by focusing on their mission, functions and associated congressional oversight.

Federal Reserve

The mission of the Federal Reserve is similar to that of the central bank in the United States. In this context, the Federal Reserve is mandated with establishing a safe and stable financial system that addresses the country’s economic needs (“Federal Reserve” par. 1).

Functions

The Federal Reserve is obligated with developing a monetary system that improves the country’s employment rate. However, this is achieved through effective monetary and credit regulations that stabilize national prices and interest rates (“Federal Reserve” par. 1). The Federal Reserve assumes supervisory and regulatory functions especially over banking institutions (“The Federal Reserve System. Purposes & Functions” 59). From this perspective, lending financial institutions are monitored to ensure consumers’ rights are not violated from high interest rates. The Federal Reserve conducts a financial risk assessment to ascertain whether the country’s economy is facing future challenges. The Federal Reserve is considered the last resort by depository institutions that require financial services. In addition, the institution lends the government with monetary services.

Congressional oversight

The Federal Reserve incorporates Board of Governors appointed by the president and confirmed by the senate. The Board of Governors has a mandate to report to the senate on matters regarding monetary policy. In fact, the board submits a report to the senate on conduct of the banking organizations, as well as administration of federal laws pertaining to credit transactions. Moreover, the Board of Governors submits an annual report to the speaker of the House of Representatives. The Senate and the House of Representatives are mandated with the role of discussing laws that guide the Federal Reserve. From this perspective, the congress passes laws aimed at improving and reforming the Federal Reserve System. In addition, the Congress is obligated to revise the Federal Reserve Act and any other law affecting national finance policies.

Department of Treasury

The Department of Treasury mission is to ensure the economy remains strong and stable. In addition, the treasury ensures that the economy supports employment and job opportunities (“Department of the Treasury” par. 1). In addition, the Department of Treasury mission is to promote economic growth domestically as a strategy of improving national security from financial threats. Moreover, the department is responsible for the protection of the United States financial resources invested locally and abroad.

Functions

The Department of Treasury main role is to manage federal finances. Therefore, the role of collecting taxes, duties and tariffs, and bills to be paid to the United States government falls under the responsibility of the Department of Treasury. The issuance of currency and coinage, as well as control, is the responsibility of the department through the Federal Reserve. As a matter of managing federal finances, the Department of Treasury supervises government accounts, national banks and credit institutions (“Department of the Treasury” par 2).

The sole mandate of advising the government on matters of both domestic and international finance is attributed to the Department of Treasury. From this perspective, the department advises the government about monetary, trade and tax policies. Moreover, the department ensures other agencies and institutions implement and enforce federal finance and tax regulations. The department has the powers to investigate and prosecute tax violators. Moreover, the department prevents counterfeits and forgeries of products and services.

Congressional oversight

The Depart of Treasury is an establishment of the Senate and House of Representatives. Therefore, the congress forms the department through an Act that seeks to improve federal revenue management. In this regard, the congress assumes the supervision and regulation role. Personnel involved in operation the Department of Treasury are vetted by the congress upon their appointment by the president. The congress ensures that the department’s personnel consist of the secretary, comptroller, auditor, treasurer, registrar and assistant secretary. The mentioned officers’ conduct is guided by predetermined responsibilities and code of conduct enshrined in the Act.

The congress supervision and control over the Department of Treasury is empowered through Congressional Oversight Panel (COP). The COP mandate is to evaluate data submitted by the Department of Treasury, as well as the performance of the department in handling matters related to finance and national economy. The COP operates in conjunction with the Office of Stabilization (OFS), especially in implementing important initiatives like the Troubled Asset Relief Program (TARP).

Securities and Exchange Commission (SEC)

The mission of the SEC is to ensure investors are protected and that there are orderly and effective markets that improve capital formation (“Securities and Exchange Commission” par 1).

Functions

SEC is mandated with the responsibility of enforcing laws of federal securities. From this perspective, SEC interprets laws and regulations attributed with the existence of federal securities. Moreover, the agency develops and issues new laws of federal securities, as well as make revisions to the same. It is the function of SEC to investigate and supervise security firms, brokers and associated agencies. Investment advisors and rating agencies are under the inspection radar of SEC. The agency ensures that public and private accounting standards are followed by private regulatory organizations, accountants and auditors. SEC is in charge of the United States securities regulation at federal, state and international levels.

Congressional oversight

The Congress advises the president to choose five commissioners as SEC top officials. The commissioners submit an annual report to the House of Representatives with details on various activities. Apparently, the commissioners are members of Public Company Accounting Oversight Board (PCAOB). PCAOB is mandated with conducting audits, filing reports and submitting the same to the Congress. The Congress expects PCAOB reports to be accurate and informative on issues regarding federal finance, investor protection and economy situations. The Congress’s oversight is guided by the Securities Exchange Act of 1934 and Securities Act of 1933.

Federal Deposit Insurance Corporation

The mission of Federal Deposit Insurance Corporation (FDIC) is to instill stability and public confidence in the country’s monetary system (“Federal Deposit Insurance Corporation” par. 1).

Functions

Stability and public confidence are established through insuring deposits, managing receiverships and supervising financial institutions. FDIC ensures that customers are protected once a bank is under receivership (Teslik 5). In this context, the agency insures customers’ savings in their respective banks. FDIC is a regulatory authority in ensuring that banks have at least 8% of assets under reserve management. Failure to comply with the above regulation subject banks to FDIC regulations, receivership, and change of management or punitive measures. Moreover, lack of compliance with FDIC results to hefty penalties and change of banking practices.

Congressional oversight

The Congress is attributed with establishment of FDIC. The Congress provides the agency with the necessary authority to monitor bank practices especially in deposit insurance funds. In addition, the Congress provides FDIC with adequate funds to manage programs under the Federal Savings and Loan Insurance Corporation (FSLIC). Moreover, the Senate vets members of the Board of Directors managing FDIC upon their appointment by the president. The Congress directs the General Accounting Office to conduct regular audits on FDIC’s ledgers for accountability purposes.

Consumer Financial Protection Bureau

The mission of Consumer Financial Protection Bureau (CFPB) is to ensure that American consumers are protected from consumer financial products and services.

Functions

CFPB ensures that consumers are provided with the right information regarding consumer products and services (“Consumer Financial Protection Bureau” par. 2). It is the duty of CFPB to ensure that consumers are protected from abusive financial practices. Therefore, the agency supervises banks, credit institutions and companies in regard to conforming to consumer financial laws (Morris 12). The agency encourages consumers to submit complaints against financial institutions that promote abusive practices. Nevertheless, it is the mandate of CFPB to research on consumer behaviors and current financial market trends and associated risks.

From this perspective, the agency establishes rules on consumer financial protection and enforces the same. According to CFPB consumer financial protection laws, emphasis is given to deposit, mortgages, debt collection, loans and use of credit cards. Nonbank financial institutions and credit unions with assets worth over $10 billion are subjected to CFPB scrutiny (“Government Accountability Office” 12).

Congressional oversight

Since CFPB acts on behalf of the Federal Reserve, it is not necessarily monitored and controlled by the Congress. The only link that exists between the Congress and CFPB is the Office of Inspector General (OIG). However, the Senate vets the OIG after being appointed by the president. The OIG submits audit reports to the Congress, but not on behalf of the CFPB.

National Credit Union Administration (NCUA)

The mission of the NCUA is to ensure eligible consumers access services of the credit union.

Functions

The NCUA investigates the establishment of federal credit unions using the relevant law and regulations. Upon approval of the established federal credit union, NCUA supervises operations of the new institution (“National Credit Union Administration” par 3). In addition, insuring of depositor accounts in credit unions is an obligation of the NCUA. In this context, NCUA administratively spearheads operations of the National Credit Union Share Insurance Fund. NCUA provides charters to credit unions, examines, supervises and insures the same at an affordable fee.

Congressional oversight

Apparently, NCUA is a creation of the congress, and therefore, the Financial Stability Oversight Council ensures that National Credit Union Authority Act is observed to the letter. In this regard, the council is mandated to report annually to the Congress with recommendations on issues related with credit unions. The Congress’s oversight in NCUA matters includes the agency budgetary allocations and policy making.

The United States Senate Committee on Finance

The Senate Finance Committee mission is to investigate, supervise and monitor matters related to taxation and revenue (“United States Senate Committee on Finance” par. 1).

Functions

The Senate Finance Committee’s main agenda is stabilization and advancement of the overall federal economy (“United States Senate Committee on Finance” par. 1). The committee is formed from members of the senate with a role to evaluate the performance of the various governmental agencies and institutions against the existing laws. The committee ensures that all agencies and institutions engage in practices that promote the welfare of the country and its citizens from an economic perspective. From this perspective, the committee has jurisdiction over the Office of the President, department of agriculture, commerce, homeland security, labor, treasury, health and human services. Other areas that the committee investigate and reviews performance include the Railroad Retirement Board, the United States International Trade Commission, Social Security Administration and the U.S. Tax Court.

Congressional oversight

Since the committee is formed by the senate members, its investigative reports and recommendations are submitted to the speaker of the senator before it is debated upon.

House of Representatives Committee on Financial Services

The mission of the committee is to provide an oversight role in terms of regulation, policy making and evaluating the performance of agencies and institutions in the financial service industry.

Functions

The committee investigates issues of banking from financial institutions especially on deposit insurance and federal policies. The committee proposes recommendations for debate by the House of Representatives where bills and laws are passed regarding finance, insurance and international monetary policies. Through the committee, issues of securities are investigated, reviewed and passed as law (“House of Representatives Committee on Financial Services” par. 1).

Congressional oversight

The committee submits findings to the House of Representatives and subsequently to the Senate for review and approval.

International Monetary Fund (IMF)

The IMF’s mission is to stabilize international monetary system

Functions

The organization monitors a country’s financial policies and evaluates the same against the economic development. The organizational offers technical and financial assistance to countries with viable development projects (“International Monetary Fund” par. 1). The United States benefits from IMF’s financial consultations and lending services.

Congressional overview

The House Financial Services Subcommittee evaluates the role of IMF in the United States and makes recommendations to the Congress. The committee evaluates IMF performance and areas of improvement in regard to the organization’s domestic and international goals, and achievements.

World Bank

The mission of the World Bank is to end poverty and promote sharing of wealth.

Functions

The World Bank engages in partnership with governments, agencies and institutions in providing financial and technical assistance (“World Bank” par. 1). The institutions main target is the developing countries, where it offers low-interest loan and grants. The institution is attributed with promoting foreign investments and industrial developments in poor countries. The institution instills economic reforms in developing countries by offering technical advisory on matters of economy and financial management.

Congressional oversight

The United States Senate Committee on Finance investigates IMF projects in the country, as well as in other countries. The committee proposes to the IMF on projects requiring urgent attention. The committee ensures that IMF attends to the United States interest as a major member of the organization. The committee proposes critical policies for the IMF to consider when funding developing countries.

Works Cited

2014. Web.

Department of the Treasury 2011. Web.

Federal Deposit Insurance Corporation (FDIC) 2009. Web.

2009. Web.

Government Accountability Office. Financial Regulatory Reform. Financial losses and protection impacts of the Dodd-Frank Act. GAO-13-180 Congressional Report. Washington: United States Government Accountability Office. Print.

. n.d. Web.

. n.d. Web.

Lambert, J. Michael and Kristin D. Stanton. “Opportunities and Challenges of the US Dollar as an Increasing Global Currency: A Federal Reserve Perspective.” Fed. Res. Bull. 87 (2001): 567. Print.

Morris, S. Charles.” What should banks be allowed to do?.” Federal Reserve Bank Of Kansas City Economic Review, Fourth Quarter (2011). Print.

. n.d. Web.

Securities and Exchange Commission. n.d. Web.

Teslik, L. Hudson. “The U.S. financial regulatory system”. Council on Foreign Relations 12 May 2008: 1-6. Print.

The Federal Reserve System. Purposes & Functions 2005. Web.

. n.d. Web.

2014. Web.

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