Essay on The Federal Reserve Is The Central Bank Of The United States

1574 Words Dec 6th, 2015 7 Pages
A society needs to be able to borrow and save money in a safe reliable manner to grow and expand. Banking in these terms can be traced back to the beginning of our culture. As the complexities of life have grown so has the need for a stronger and more centralized banking system. The panics and fears of losing everything in small independent banks lead to the rise of a need for a central banking system in the country. This system as we know it today is the Federal Reserve, The Federal Reserve is the central bank of the United States. The institution has a rich history that will need to be explored to fully understand it. After exploring the birth and history of this organization the purpose for its development can be brought up. The Fed also has a strong and unique structure in the country. Lastly, it has numerous tools at its disposal that can be used to shape economic policy.
To understand the present one needs to explore the past. During the late nineteenth and early twentieth century there were numerous finical panics that threatened to rip apart the financial system as it was known at the time. These panics forced banks to fail and businesses to go belly up effectively crippling commerce in the country. A particularly severe crisis in 1907 prompted Congress to establish the National Monetary Commission, which proposed an institution that would help combat these kinds of financially crippling crisis and issues. After much debate, Congress passed the Federal Reserve Act…

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