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The Federal Reserve Essay, Research Paper

The Federal Reserve System

?The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system.?

As America began developing over time choices were made for the production of currency this clearly lead to the creation of banks. Banks were set of by people within a community to lend, keep, and, use currency. As the development of the economy increased citizens used currency more and more and the use of the bank system was increased as well. With shifts in the economy and the developing of the depression, Citizens would occationally panic for false reasons and go and pull out there money from the town bank. With the great number of citizens pulling there money out the bank would have to close due to not having any finacial support.

As innocents like these persisted it became clear that there needed to be a was to protect banks from sudden rushes of citizens to retrieve there money.

President in 1913 president Woodrow Wilson signed the Bill partaking in the creation of the Federal reserve. The federal government to protect banks then created it and its funding to people by providing a flexible means of payment to each and every bank that was a part of it. Currency was then controlled and produced by the federal government. At first many citizens and banks protested the creation of the federal government they feared that it was the beginning of the control the bank system.

Over the years the federal reserve has saved and protected many banks from collapsing and the federal reserve has also solved many other problems that existed with the banking system. ?The district banks are headed by a president who is selected by a board of directors.? The directors observe assist and control some changes that banks partake in. The federal reserve is made up of branches that are spread out through every state and are there to closely observe the banks within the state. If large shifts in money must be completed then they are handled by the central reserve.


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