Federal Reserve Essay
In the late 1800’s, and early 1900’s, the US experienced multiple panics. The worst panic at date was the Panic of 1907. After the Panic of 1907, Congress began to establish the Federal Reserve. The Federal Reserve became the third central bank of United States in 1913. It was formed in an attempt to prevent further panics from occuring.
Unlike the first two US central banks, which recieved 20 year Charters, the Fed was given an open ended Charter. This meant that the Fed could be shut down with a government vote at any time. This also made it the first central back that could be voted to close, rather than stay in opporation.
The two main jobs, or purposes, of the Fed was to control the money supply and oversee …show more content…
The first reform was the Banking Act of 1933 & 1935. This Act was put into place in order to expand the power of the Fed, by bringing the power back to a more centralized location. To do so, a more centralized power structure was adopted. The Federal Reserve Board was replaced by a Board of Governors, which was also given most of the power. The second reform was the Monetary Control Act of 1980. This Act gave the Fed some control over non-bank financial institutions, in order to have better control of the money supply.
The current structure of the Fed consists of the Board of Governors, District Banks and the Federal Open Market Committee. The Board of Governors is the center of power, located in Washington DC. It consists of 7 members, including the Chairperson of the board. Each member is appointed by the President and confirmed by the Senate. Appointments are staggered every couple years and last 14 years, except for the Chair, which lasts 4 years. Members can not be re-appointed.
There are still 12 district banks today, but they are not as powerful. Each are ran by a District Bank President. The most important district today is in New York, District
In the late 1800’s, and early 1900’s, the US experienced multiple panics. The worst panic at date was the Panic of 1907. After the Panic of 1907, Congress began to establish the Federal Reserve. The Federal Reserve became the third central bank of United States in 1913. It was formed in an attempt to prevent further panics from occuring.
Unlike the first two US central banks, which recieved 20 year Charters, the Fed was given an open ended Charter. This meant that the Fed could be shut down with a government vote at any time. This also made it the first central back that could be voted to close, rather than stay in opporation.
The two main jobs, or purposes, of the Fed was to control the money supply and oversee …show more content…
The first reform was the Banking Act of 1933 & 1935. This Act was put into place in order to expand the power of the Fed, by bringing the power back to a more centralized location. To do so, a more centralized power structure was adopted. The Federal Reserve Board was replaced by a Board of Governors, which was also given most of the power. The second reform was the Monetary Control Act of 1980. This Act gave the Fed some control over non-bank financial institutions, in order to have better control of the money supply.
The current structure of the Fed consists of the Board of Governors, District Banks and the Federal Open Market Committee. The Board of Governors is the center of power, located in Washington DC. It consists of 7 members, including the Chairperson of the board. Each member is appointed by the President and confirmed by the Senate. Appointments are staggered every couple years and last 14 years, except for the Chair, which lasts 4 years. Members can not be re-appointed.
There are still 12 district banks today, but they are not as powerful. Each are ran by a District Bank President. The most important district today is in New York, District