Federal agency – What is it, definition and concept

A federal agency is a government entity that, as its name implies, is part of the federal government. These institutions are usually created for particular purposes such as the regulation of an industry or the implementation of a public policy.

That is, a federal agency is an institution, dependent on the federal government, established in order to develop a special activity such as the supervision of a market or the attention of some need of the citizenry.

At this point, we must remember that federalism is a model of political and territorial organization that is based on the coexistence and administrative coordination that exists between different territories that depend on a central power that derives its powers from them. However, each territory has some autonomy.

An example of a country where federalism exists is the United States. Thus, each state has different laws in certain areas, for example, the penalties for certain crimes. However, there is a legislative framework with scope for all states, through a national constitution.

In this sense, we reiterate that federal agencies are part of the federal government, having scope in all the territories that make up the federal state.

Characteristics of a federal agency

Among the characteristics of a federal agency we can highlight:

  • They are created for activities such as the regulation of the transportation system, the preservation of natural resources, food security, or another specialized topic.
  • Its creation may be at the initiative of the Legislative Power or the Executive Power.
  • The directors of these agencies, depending on the regulatory framework that regulates them, may be appointed by the president or by Parliament, or by both. Each entity may contemplate a different procedure.
  • Several of these agencies, for example in the United States, can issue securities such as stocks and bonds.
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Examples of Federal Agencies

Some examples of federal agencies may be, for example, the Federal Housing Administration or FHA for its acronym in English (Federal Housing Administration). Its function is to insure mortgage loans granted by banks and credit institutions in the United States.

Another example could be the Federal Deposit Insurance Corporation or FDIC by its name in English (Federal Deposit Insurance Corporation). This entity insures, up to a maximum of $250,000, bank deposits in the entities under its supervision.

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