The Federal Reserve Act Is The Central Bank Of The United States
The Federal Reserve is the Central Bank of the United States which was created by the Federal Reserve act in 1913. This Act of Congress established the Federal Reserve as the sole issuer of currency, Federal Reserve notes, which we commonly call the US dollar. The Federal Reserve was created to alleviate banking panics that had occurred throughout the history of the United States, with hopes to assure investors that their deposits were safe. Kevin Hassett from the American Enterprise Institute states, “For 94 years, the Fed has been the central bank of the United States. Its primary duties are conducting the nation’s monetary policy, supervising and regulating banks, and providing financial services and liquidity (that is, ready cash) to depository institutions and the federal government.”
The basis for the creation of the Federal Reserve includes four parts:. To create an elastic currency, concentrate reserves from banks, provide a clearing system that allows gains to be realize, and provide the government with banking operations. The Federal Reserve consists of 12 regional reserve banks, a Washington-based board of governors, and the Federal Open Market Committee. To understand the history of the Federal Reserve, we must first examine the banking system in the United States that preceded it.
The earliest attempts at banking
Shortly after declaring our independence, The Continental Congress created the first paper currency used by the United…