Federal Reserve

The Federal Reserve, or The Fed is the central banking system of the United States. It was created in 1913, and is a part private, part government banking system.

It is composed of:

(1) The presidentially appointed Board of Governors of the Federal Reserve System;
(2) The Federal Open Market Committee;
(3) 12 regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury;
(4) Numerous private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks;
(5) Various advisory councils.

The purpose of the Federal Reserve System include:
• To address banking panics in case of bank runs;
• To serve as the central bank for the United States. As the banker's bank, it helps to assure the safety and efficiency of the payments system;
• To strike a balance between private interests of banks and the centralized responsibility of government;
• To manage the nation's money supply and influence the interest rate. The objective is to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment.
• To maintain the stability of the financial system;
• To strengthen U.S. standing in the world economy.