The Federal Reserve: Central Banking In The Us Essay -- Economics Econ

The Federal Reserve: Central Banking in the U.S. The Federal Reserve as we know it today was created by the Federal Reserve Act of 1913 by President Woodrow Wilson. The Fed, as it is commonly referred, is the central bank for the United States. Primarily, the Fed's job is to manage our nation's money supply. Prior to establishing the central bank, the United States did not have a money manager and the financial system was similar to the nation itself, "diverse and subject to uneven growth" (San Francisco). This led to frequent depressions and financial panics, and after the Bank Panic of 1907, which consisted of heavy withdrawal of funds, large importations of gold, and among other things, a major bank failing, the public realized a central bank was necessary (Herrick). The Federal Reserve System is composed of four basic components; the Federal Reserve Board of Governors, the Federal Open Market Committee, the Federal Reserve Banks, and member banks. The Board of Governors of the Federal Reserve System is an independent federal agency that does not receive any funding from Congress. The Board is made up of seven members who are appointed by the president for one term of 14 years that can span multiple presidential and congressional terms. Two of the appointees are designated by the president as the Chairman and Vice Chairman of the Board, to serve four-year terms, subject to Senate Confirmation. The Chairman of the Board of Governors is one of the most important decision-makers in American economic policies. Even though members function independently, the Board is required to make an annual report of operations to the Speaker of the House. If the president sees "cause," a member may be removed from the Board. T... ...rable stock in their regional Federal Reserve Bank. Works Cited "Court Rules Federal Reserve is Privately Owned." Save-A- Patriot. 23 Jul 2007 . "Fed FAQs." Federal Reserve Bank of Dallas. 2007. 23 Jul 2007 . Federal Reserve Bank of Kansas City, "FED101." The Reserve Today. 2007. 23 Jul 2007 . "The Federal Reserve System in Brief: The Nation's Central Bank." Federal Reserve Bank of San Francisco. 30 Aug 2006. 23 Jul 2007 . Herrick, Myron. "The Panic of 1907 and Some of Its Lessons." Annals of the American Academy of Political and Social Science 31(1908): 8-25. Kemmerer, Edwin. The ABC of the Federal Reserve System. Fourth. Princeton, N.J.: Princeton University Press, 1920. Obringer, Lee Ann . "How the Fed Works." Howstuffworks. 02 May 1992. 23 Jul 2007 . "Open Market Operation." Federal Reserve Bank of New York. 2007. 23 Jul 2007 .