The Federal Reserve and Federal Reserve Banks
The Federal Reserve System is the central banking system of the United States of America and is also known as the Fed. The main tasks of the Federal Reserve are controlling the amount of currency made and destroyed on a daily basis, supervise and regulate banks, and maintain a strong payments system. It also implements monetary policy by open market operations, setting the discount rate and setting the reserve ratio.
The Federal Reserve involves economic education and research as well as community outreach. One of the biggest goals of the Federal Reserve is to minimize risk in the banking system.
President Bush recently nominated Ben Bernanke as the new Chairman of the Board of the Federal Reserve. Bernanke replaced Alan Greenspan when he retired after eighteen years as Chairman. The Chairman takes the lead role in directing Fed policy. The most important duties of the Federal Reserve authorities correspond to the maintenance of monetary and credit conditions in favor of business activity in fields such as agriculture, commercialism, and industry.
The Federal Reserve System was originally created to establish a new central bank designed to add strength and flexibility to the nation's financial system. After the first Reserve Banks opened in 1914, Congress created Federal Reserve Notes to provide the nation with an elastic supply of currency. [1]The notes were issued to the Reserve Banks for subsequent transmittal to banking institutions in accordance with the needs of the public.
The Federal Reserve System is independent within the government; it has both private and public aspects. The System is independent of other branches an ...