American financial system consists of numerous commercial banks, Mutual savings Banks, Credit Unions and of course the most powerful institution, the Federal Reserve Board. These institutions are responsible for controlling the operations of the financial markets but the capitalist system of economy has rendered the task difficult. This is because while the financial system is supposedly under the control of these institutions, the financial markets they have created are wild and volatile and rarely cooperate with these institution or their policies. Therefore some regulatory tools have to be applied in order to bring some stability to the financial markets but events of recent pasty indicate that tools are now less effective and some sound changes are required in the restructure of the financial system of United States.
