Essay about The Federal Reserve Is A Big Part Of Today 's Economy

1013 Words Dec 1st, 2014 null Page
The Federal Reserve: Explained
The Federal Reserve is a big part of today’s economy. The Federal Reserve controls the money in the United States without any power of political parties; it is its own entity (Satterthwaite, 2014). The board of Governors based in Washington D.C, and 12 regional Federal Reserve Banks located in the U.S. major cities, regulate the flow of money in the economy (Federal Reserve, 2014). The reserve has its own set of rules and regulations that must be followed.
The Federal Reserve was born in 1913 (Satterthwaite, 2014). After the United States was bailed out by business mongrel J. P Morgan in 1907, country could not rely on the wealthy to bail them out each time there was a financial crisis (Federal Reserve Bank of Richmond, 2014). The need for a central bank was mandatory to keep the country flowing. Representative Carter Glass of the House of Banking and Currency Committee took his thoughts on how the central banks should be run and incorporated them with Sen. Nelson Aldrich’s ideas to create the Federal Reserve Act, which was signed in December of 1913 (Federal Reserve Bank of Richmond, 2014). Congress established the Federal Reserve as dictator of the nation’s central banking system. Commercial banks mirror the way the Federal Reserve banks do many of their businesses with depository institutions. Commercial banks deal directly with business and customers. However, the Federal Reserve does not provide banking services to individuals only to…

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