The Federal Reserve

1337 Words6 Pages
The Federal Reserve has been around America for more than a century. It has helped America keep a stable central bank, have maximum employment, and many more great advantages. The Fed isn’t just a tiny piece of the puzzle; it has a great deal of importance with the roles it plays in everyday life that not a lot of people know of. With the Fed basically being the bank of every bank in America, it has a lot of responsibility. Over the past one hundred years the Federal Reserve has proven to benefit American banks and remains a key component of the mechanism with which government stabilizes and regulates the economy. The American financial system before the Federal Reserve came along in 1913 was tragic. With the economy on the rise, growing…show more content…
President Wilson stepped in, along with the house and senate, determining that the Federal Reserve was to be independent from the government. After decades of having no financial stability, the Fed was soon to be one of the biggest achievements in the Progressive era.
With the Fed now being put into place, the economy was booming all over again, in a safer manner. The Fed supported all banks across the country by acting as the main bank to all other banks, developing a national currency. Banks must have an account with the Fed, having the Fed keep a certain small percentage of the income to keep as a reserve. The national currency is heavily dependant on the Fed, as it’s the Government 's chief fiscal agent for being the holder of its gold, serving as a reserve for the nation’s banks. This money from the reserves is very helpful, as a large portion of the money stored was used to help pay for expenses in WWI and WWII.
The Fed embraces four main areas of activities. First, conducting the nation’s monetary policy by influencing the credit conditions in the economy in pursuit of maximum employment and stable tax prices. Maximum employment is a crucial part of making America run, by making jobs for the people and lowering the unemployment rate. Stabilizing tax prices is a hard job to enforce, but the Fed does its best to reduce tax prices jumping up and down, making it more sturdy. Secondly, supervising and regulating banking institutions to ensure the

More about The Federal Reserve

Get Access