Complexity of the US Financial System A lot has happened in the US financial market in recent years. They have affected the economy, businesses and individuals. The president and the Federal Reserve Board, responsible for monetary policy, have lowered interest rates to virtually zero in an attempt to revive the economy. The effect is not only being felt in the United States but also globally. When U.S. financial markets function smoothly, it will be a contributing factor to having a strong and efficient economy. The flow of savings and investments that financial markets efficiently drive helps drive the accumulation of funds and the production of goods and services (Federal Reserve Bank of San Francisco, 2005). So if the U.S. financial markets struggle, so will the economy because of their close relationship. The U.S. financial market influences the ability of businesses to receive loans, their capital, and production. If there were problems, sales would decline and production would drop. U.S. financial markets would not be able to keep money flowing into business, through loans or investments, at the pace they are accustomed to, causing funds to dwindle. The individual would be affected at the same time if there was a decline in the US financial markets. Jobs would be in jeopardy, inflation would make it harder to afford basic necessities, and people could lose their place to live due to financial hardship. This is where the Federal Reserve Bank comes in. The Federal Reserve's primary role is to direct monetary policy. Monetary policy governs the development and accessibility of money and credit. Fed influences flow to reach… middle of paper… monetary policy is doing what it was intended to do. Works Cited Amadeo, K. (2013, July 2). How are interest rates determined?. Retrieved from http://useconomy.about.com/od/interestrateindicators/p/interest_rate.htmlFederal Reserve Bank of San Francisco. (2005, January). Please explain how financial markets can influence economic performance. Retrieved from http://www.frbsf.org/educationFederal Reserve Bank of St. Louis. (2011). Low interest rates come with benefits… and costs. Retrieved from http://www.stlouisfed.org/publications/itv/articles/?id=2082Federal Reserve Board. (2003, July 8). The Board of Governors of the Federal Reserve System. Retrieved from http://www.federalreserve.gov/pubs/frseries/frseri.htmMcGuigan, B. (2014, February 15). What is a Federal Reserve Chairman? Retrieved from http://www.wisegeek.com/what-is-a-federal-reserve-chairman.htm