The Federal Reserve System Of The United States Essay

875 Words Nov 19th, 2016 4 Pages
The Federal Reserve System, the main group who control the money supply in the United States. The Federal Reserve consists of 12 Federal Reserve district banks with 25 branches. The Federal Reserve System is the central banker for the nation and provides banking services to commercial banks, the federal government, and other financial institutions. They also regulate, supervise and is responsible for policies concerning money. The president and congress consult with the Federal Reserve System to control the size of the money supply to influence the economy’s performance. In the twentieth century, the movement of the United States gained strength to establish a central banking system, but soon resulted in a series of bank failures in the Panic of 1907. During that year, businesses and banks failed, depositors lost their deposits, and most of all stock prices fell. To prevent this horrifying panic, the government begun to establish a more centralized control over banking systems. The safety and desire to protect businesses, depositors and stocks led to the creation of the Federal Reserve System by the Federal Reserve Act of 1913. The supply of money in the economy will no longer be determined by the individualized banks. The Federal Reserve System is an independent institution of the federal government. The chair of the Fed reports to Congress about twice each year and coordinates its actions with the U.S. Treasury and the president. Congress is held responsible for…

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