The member banks of the federal reserve sell shares to private banks?

Question

VOXYGEN YOU GIVE FALSE ARGUMENTS. I AM SICK OF YOUR EXPERT CRAP.

YOU ARE READING OUT OF A BOOK AND NOT USING YOUR LOGIC.

Answer 1

Individual commercial banks that are members of the Federal Reserve System must buy Federal Reserve stock.

Answer 2

Yes. The member banks of the Federal Reserve each have a "paid up capital" which is also called the stock of the regional Federal Reserve Bank to which they belong. The Federal Reserve Banks in turn are a part of the Federal Reserve System. Member banks own shares in their local Federal Reserve Bank, and not the Federal Reserve System

There are several big differences between this type of stock and a typical Wall St. stock.

1. The bank can't sell its stock. It has to keep the capital on deposit with its local Fed bank as a part of its required reserves.

2. There is no possible capital gain since the value of the stock doesn't change.

3. The shares receive a 6% dividend as provided by the Federal Reserve Act.

4. Most stocks have a one share one vote governance mechanic. At the Fed it's one vote per one member bank even though large banks have a lot more tied upo in Fed shares than small ones.

5. Member banks do not elect all the directors of their local Fed bank, only some.

Edit to respond to comment:
Regardless of whetehr you think it's "made up crap" it's also the law. LOL! Read the Federal Reserve Act of 1913 and interpret it for yourself.

Answer 3

The Federal Reserve equipment describes itself as a not for income enterprise it quite is in the U.S. government yet self sustaining of the government (a minimum of till and till its permitting law gets amended). despite if defined as a "not for income", the Federal Reserve equipment does make a income and it does not require investment from Congress. The Federal Reserve Banks additionally make a income, of which, approximately ninety two% is going to the U.S. Treasury. Does the Fed "make funds"? definite it quite is quite what it does! in simple terms like numerous inner maximum economic enterprise? No. The Fed is in comparison to numerous inner maximum economic enterprise. Edit: reaction to asker's comments. you have asked a question and that i've got spoke back it. What inner maximum banks make from their possession of Fed shares is fastened via statute for the duration of the Federal Reserve Act of 1913, as amended. enable's wish that as quickly as the government needs to create a equipment of regulation that it takes the time to understand what it quite is regulating. in this actual case, following the Panic of 1907 there replaced right into a consensus in the country that there could be, throughout back, a important economic enterprise in the U.S. according to the Vreeland-Aldrich Act a countrywide economic fee replaced into authorized to plot a plan (aka the Aldrich Plan). This plan proposed an fullyyt inner maximum Fed. The Plan wasn't appropriate to Democrats and subsequently it replaced into changed to make the Fed a factor of the government according to the Act of 1913. provided that then, it quite is been amended and there are further Acts (economic administration Act, Humphrey Hawkins, etc.,etc., etc.) that come and pass and regulate the unique plan. not least, the money in the 1913 Fed replaced into on a maximum appropriate. via fits and starts, it quite is a fiat forex now. And definite, a economic enterprise with a countrywide shape does not have a option to no remember if or not it quite is going to likely be a member economic enterprise of a minimum of between the interior of reach Fed banks. they could achieve this via regulation.