The Federal Open Market Committee

The Federal Reserve is the single entity in control of the monetary policy of the United State of America. Monetary policy is the process that the Federal Reserve takes in order to control the supply of money and to attempt the control the direction of interest rates. The reason for doing these actions is in attempt to control the country’s inflation and employment rates, which are the biggest indicators and factors of a healthy economy.

Federal Reserve can be very confusing to understand and know what is their purpose and how they help the economy. The Federal Reserve was started in December 23,1913 by President Woodrow Wilson who sign the Federal Reserve Act. The Fed has many things that it controls in are economy. One of the Reason that President Woodrow Wilson put the Federal Reserve Act in to place because in 1913 there were a feel that banks were instable so many investors did not feel confident in the banks and felt that it was unsafe. One thing that made Woodrow Wilson make the Federal reserve is the people making a run on the banks frequently, which many bank at this time did not keep enough money in the bank and people panic heard about other banks falling so they would try and get all their money out of the banks as fast as possible. With so many people running on the bank would cause the bank to fell which became a big problem following the Great Depression. Then Woodrow Wilson need to find a way to make the bank safer and build a more secure financial system. One thing to understand is also the monetary policy which refers to Fed nation central bank, which influence the amount of money and credit in the U.S. economy and how we spend money and credit affects interest rates which help the U.S economy perform. However, the monetary policy main reason it to promote maximum employment, stable prices, and long term interest rates which help the feds control the economic growth.

The credit system of the country had ceased to operate, and thousands of firms went into bankruptcy (Born...,.12). Something had to be done that would provide for a flexible amount of currency as well as provide cohesion between banks across the United States. (Hepburn, 399) This knight in shining armor, as described in the story of the bank run, was the Federal Reserve. The Federal Reserve Act of 1913 helped to establish banks as a united force working for the people instead of independent agencies working against each other. By providing a flexible amount of currency, banks did not have to hoard their money in fear of a bank run. Because of this, there was no competitive edge to see who could keep the most currency on hand and a more expansionary economy was possible.

The Federal Reserve was created primarily to be the lender of last resort to provide cash during a financial panic; however, their responsibilities have evolved and increased over time. In November 1977, Congress expanded the Feds responsibilities with the Federal Reserve Act to include the creation of monetary policies to promote price stability and the maximization of employment to keep the economy moving

After the Civil War started, another need for a national bank emerged. The government wanted to learn from the mistakes of the first and second banks, so they developed the National Bank in 1869, which was modeled after the free banking system. This system allowed banks to choose between state and national charters. Though the bank was transformed into another bank in 1913, this was the United States first success at a uniform currency. Finally in 1913, the Federal Reserve was established. The architects of the federal reserve learned from the mistakes from the previous banks so that they could make this bank a success. This new federal reserve bank was given control over the nation’s payment system. The federal reserve was broken up into 12 District Banks that operated independently, so that there was not a concentration of power. Though not the original role of the Federal Reserve, today it is best known for the monetary policy. Today the federal reserve is run by the Board of Governors,which are seven members that are appointed by the President and are approved by the Senate. The Federal Reserve is composed of the Board of Governors, and twelve district

This brings us to the Federal Reserve. The Federal Reserve is a private entity that is not connected or governed by the United States. It came into existence in 1913 by the Federal Reserve act. Many people believed are still believe it is a part of our government. Sadly, they are greatly mistaken. It originated from Jekyll Island are very wealthy people gathered to create it for their own selfish and personal gain from which only they controlled. The founding fathers stated clearly in the Constitution that there should never be a central bank and that gold and silver should be legal tender. The Federal Reserve act single-handedly broke this law with the issuance of paper currency. The main consensus would be that the American people would now be able to store their gold and silver or “wealth” “safely” inside these banks behind both doors for a small fee. In return they would be given paper notes correlating with the amount of gold or silver they deposited in the bank. If they were to spend these notes at a merchant 's store the marching could then decide to go to the bank and deposit the notes for the equivalent in gold or silver. It was such a great system that other countries decided to trust it and store their gold in US banks. In return they also got US dollars. Seems like a pretty solid monetary system right? Well it was for a while, until certain people started to become greedy. The people with control and power took advantage of the system. Think

Unfortunately, most Americans either do not know what the central banking system in the United States is, or assume it is just another department run by Congress and the federal government. However, the Federal Reserve System, or colloquially, the Fed, is an independent agency and should remain independent for a variety of reasons.

The Federal Reserve was created by an ACT of the U.S. Congress in 1913. Markets very often were unstable due to the public having very little faith and trust in the private banking system, which was self-evident during several periods in our countries history, most notable the run on the banks in the 1920s and 1930s. The Federal Reserve was created as an independent entity, however it is subject to oversight from Congress, and Congress periodically reviews the Fed 's activities. The chairman periodically appears before congress to outline and explain

The Federal Reserve was established as the Central bank of the United States in late 1913. Commonly referred to as “the Fed,” it is responsible for managing currency, money supply, and interest rates (Lecture, 10/6). While the bank is given much autonomy over its actions, it is not independent from the US government in that the legislature is responsible for allowing the Federal Reserve to act freely, and elected officials appoint central bankers. These are two primary mechanisms for keeping the Fed in check, insuring that it is acting in the nation’s best interest (O, 286). Countries with central banks that are independent from their governments tend

The Federal Reserve house the Board of Governors, The Federal Reserve Banks, The Federal Open Market Committee (FOMC), and Advisory Committees. The Federal Reserve Bank is directed by the Board of Governors or Federal Reserve Board, which is located in Washington D.C. The Board of governors is the national aspect of the Federal Reserve System and consists of nine board of directors which are appointed by the President serve a fourteen year term. The Chairman and Vice Chairman are appointed to four year terms which can be renewed (Federal Reserve, 2009). The Federal Reserve Banks are a network of 12 banks with 25 branches. Each banks serves a region of the country and the 12 locations are “Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco” (Federal Reserve System, 2001). These Federal Reserve Banks serve other banks, the U.S. Treasury and inadvertently, the public. The FOMC is made up of twelve members, seven from the Board of governors and five Federal Reserve Bank presidents (Federal Reserve System, 2001). The Advisory committee advises on the Federal Reserve System and provides information on the effect of system policies. The advisory committee includes the Federal Advisory Council, the Consumer Advisory Council, and the Thrift Institutions Advisory Council, which work together to advise individual Federal Reserve Banks on these interests (Federal Reserve System,

After the Revolutionary War, many of the country’s citizens were in great debit and there was widespread economic disruption. The country was in need of an economic overhaul and the new country’s leaders would need to decide how to do this to ensure the new country did not fall apart. After two unsuccessful attempts at a national banking system, the Federal Reserve System was created by the Federal Reserve Act of 1913. Since its inception, the Federal Reserve System has evolved into a central banking system that grows with the country. The Federal Reserve System provides this country with a central bank that is able to pursue consistent monetary policies. My goal in this paper is to help the reader to understand why the Federal

The Federal Reserve System was founded by Congress in 1913 to be the central bank of the United States. The Federal Reserve System was founded to be a safer, more flexible, and more stable monetary financial system. Over the years, the role of the Federal Reserve Board and its influence on banking and the economy has increased. Today, the Federal Reserve System's duties fall into four general categories. Firstly, the FED conducts the nation's monetary policy. The FED controls the monetary policy by influencing credit conditions in the economy. The FED measures its success in accomplishing these goals by judging whether or not the economy is at full employment and whether or not prices are stable. Not only

The purpose of its creation was pretty straight-forward, that is, to prevent failures in banking (Meltzer & Allan, 2010). During the time of its inception, the United States had gone through a vicious banking crisis in 1907. The crisis gained importance as it was observed how Knickerbockers Trust failed to receive support from its peers, even after voluntarily seeking for it. It ultimately faced collapse due to failure in receiving support. This also had a significant influence on the psychology of the public as the peers of Knickerbockers apart from not recuing it, also cancelled payments to each other. The New York Stock Exchange collapsed by fifty per cent until liquidity was injected by the initiatives of financier J.P. Morgan which then relieved the situation to some extent. The legislators then in response vehemently advocated putting in place a central banking system, which would be able to provide liquidity in the case of a wholesale downfall. It can be said with hindsight that the machinery back then used to be very sophisticated. The Wall Street Journal also published a comprehensive fourteen-part series which emphasized on the need for a central banking system. The idea received further endorsements from the public groups and trade organizations. Hence the Federal Reserve was born. It was meant to be a politically autonomous institution that would provide stability to the financial system, protect the

The Federal Reserve System is a central banking of the US Government, most commonly known as the Fed. A central bank serves as the banker to both the banking community and the government. It issues the national currency, conducts monetary policy, and plays a major role in

1837 - 1914: U.S did not have a central bank. Gold and silver were the monetary base and having a fixed rate, an advantage to having a self-equilibrium effect to the market.  Thus, the inflows and outflows of gold and silver are according to the market needs hence, no need for a central bank. In terms of foreign currency, the exchange rate is based on dollarization, a process where countries outsource their monetary policy