The board of governors is the policy making body at the fed and is responsible for setting the (rate of interest charged to commercial banks) and the reserve requirements (the amount of customer deposits which commercial banks must hold back and not loan

Discount rate

Explanation:

The discount rate, also known outside of the U.S. as the bank rate, is the interest rate that the Fed charges commercial banks, usually for short-term loans.

Commericial banks do not often borrow from the Fed, and when they do, it is usually to meet a short-term liquidity requirement.

It is also referred to as the discount window.

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