The Federal Reserve has three main functions. First, it provides the nations banks, thrifts and credit unions with certain services such as check processing and electronic funds transfers. Second, it is the bank for the U.S government and holds the government accounts for collections and disbursements. As part of this function it acts as the Treasury’s agent when it sells securities and bonds. Thirdly, the Federal Reserve is responsible for governing the policies of money and credit that is available in the U.S. economy.

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