The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907.
The Federal Reserve Board has regulatory and supervisory responsibilitiesover banks that are members of the System, bank holding companies, international banking facilities in the United States, Edge Act and agreement corporations, foreign activities of member banks, and the U.S. activities of foreign-owned banks.
In its public pronouncements, the Federal Reserve was very clear that it thought that a variety of policy steps, for example in fiscal and housing policies, would be required to really get the economy moving.
Represents an almost unique hybrid or blending of elements of governmental power with elements of private ownership and control.
The institution that holds the primary responsibility for the making and execution of American monetary policies. Its bank notes circulate today as the United States' everyday paper currency.
Both of these actions helped to lower longer-term interest rates
In August the Federal Open Market Committee (FOMC) announced that it expected the federal funds rate to remain at its current extraordinarily low level at least through mid-2013; and in September it announced a "Maturity Extension Program" for its portfolio of Treasury securities whereby it would sell shorter-term securities and use the proceeds to buy longer-term securities.
The stock market crashed, and as the banks struggled with liquidity problems, the Federal Reserve actually cut the money supply. Without a doubt, this is the greatest financial panic and economic collapse in American history - and it never could have happened on this scale without the Fed's intervention.
From the early 1920s to 1929, the monetary supply expanded at a rapid pace and the nation experienced wild economic growth. Curiously, however, the number of banks started to decline for the first time in American history.
Another area of Board responsibility is the development and administration of regulations that implement major federal laws governing consumer credit such as the Truth in Lending Act, the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act and the Truth in Savings Act
The Board sets reserve requirements and shares the responsibility with the Reserve Banks for discount rate policy. These two functions plus open market operations constitute themonetary policy tools of the Federal Reserve System.
Federal Reserve Board of Governors oversees the entire system. The president appoints six of the governors (subject to Senate confirmation) to 14-year terms and the board's chair to a 4-year term. (The president's and chair's terms of office do not overlap, however.) Alan Greenspan is the current chair.