The Federal Reserve System Is A Banking System Of The United States

2774 Words12 Pages
Keyonna Gregory
October 25, 2014
BUS 254
Internet Workshop

Question 1a. Write a one page concise or two pages double spaced summary explaining the Federal Reserve.

Basically, the Federal Reserve System is a banking system of the United States. “It was created in 1913, with the enactment of the Federal reserve Act” (2014). There are many responsibilities the Federal Reserves has which include, supervision and regulation, monetary policy, payment services and finally the financial stability. President Woodrow Wilson signed the Federal Reserve Act, into a law. There are also many events that led up to the signing of the Federal Reserve Act that stuck out to me.
The money and banking systems weren’t the same in Colonial America. Colonial banks were not allowed to accept deposits from the public or make loans. Instead, they issued paper currency backed by metals and goals. Colonists were also limited to using bartering, European coinage as their primary means of exchange. “The legislation created a uniform national currency and permitted only nationally chartered banks to issue bank notes” (2014).
There was a period of a free banking era. There was a huge need for a reliable banking system during the civil war. Many banks did not keep enough money on hand to meet the normal demands. People lost their confidence in the banks and then began to go take their money out. This triggered a succession of bank failures. The Federal Reserve System had a severe financial crisis, in
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