As far as we are concerned the financial sphere in the USA is large and complex. Here one can find state banks, financial organizations like Payday Depot, and several levels of control. Let’s discuss a few special features that are not common in other countries.
Impoundment
It should be noted that in the United States there is a rather original institution that is called an impoundment.
It means the President’s refusal to spend money appropriated by law by Congress. Legislative regulation of such a situation was determined only in 1974. According to the law, in the event of a budget conflict, the President is obliged to address Congress with a special message, which explains the reasons that caused the refusal of use or termination of spending of allocated funds.
Congress can overcome the sabotage by passing a bill authorizing appropriations. Still, a special role in the management of the country’s financial system belongs to the President of the country, who is the Head of Government.
FRS
It is also worth noting the existence of the US Federal Reserve System, which actually performs the functions of the Central Bank. It is the main one in the banking system and carries out control over the monetary policy on the level of the country.
The FRS is an association of 12 US regional banks and is headed by a 7-member Board of Governors appointed for 14-year terms by the US President. These banks are located in the main cities of 12 districts, into which the territory of the country is divided, the Board of Governors is in Washington. The capital of the FRS is formed by selling shares to private commercial banks that become its members. Currently, the member banks of the FRS are approximately 40% of the US commercial banks and national banks. In addition, the Federal Open Market Committee and the Federal Advisory Council function as part of the FRS.
The FRS acts as a financial agent and depository of the US Treasury Department and carries out current operations for the management of public debt. In addition, its banks exert a decisive influence on the management of the whole US banking sector.
A certain contribution to financial management is also made by the judicial branch of the US government, which is represented by federal, state, and local courts. When considering the sphere of finance, the courts control the legality of financial relations. It should be noted that in the USA there are special courts that decide certain types of disputed issues of a financial nature, for example, tax courts.
Together with the federal level, financial policy is formed and implemented by the legislative, executive and judicial bodies of the states, which have fairly wide autonomy in this sense. Each state has its own laws and constitution, which generally do not conflict with the Constitution and laws of the USA. At the same time, restrictions on the rights of states concern issues of foreign relations, military and customs spheres, and other national affairs.