The Federal Reserve Essay -- Economics

To fancy the purpose and role of the federal book System, we must first shaft the origin of the central bank of the United States. On December 23, 1913 electric chair Woodrow Wilson signed The national guard Act. The primary purpose of the act was to constrain sure that a supply of money and credit would be functional in the United States to meet banking demands by establishing Federal Reserve Banks which would keep open the responsibility of supporting the credit structure during periods of financial strain. Other banks were expect to rely on the Federal Reserve for emergency cash and credit. judicature and banking influence would select the management, primarily a board of directors chosen by banks. Supervision would be by the Federal Reserve Board. The intent in 1913 was to create eight to twelve centrally located district Federal Reserve Banks and national banks would be required to keep a opus of their reserve with the Federal Reserve. The Federal Reserve wou ld commence deposits from the government and receive deposits and lend to member banks only. It took almost a year to determine the boundaries of the resolute twelve districts and establish the twelve Reserve Banks (one of the four components of the Federal Reserve). Named afterwards the city in which they are located, the twelve Banks are Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Federal Reserve plays a significant role in maintaining the stability and fluidness (the ability to turn an asset into cash) of the financial system by on the job(p) towards low and stable inflation and also strive to encourage egress in output and employment . A second component, the Federal Reserve Board... ...y 10). Retrieved May 23, 2012, from Board of Governors of the Federal Reserve System http//www.federalreserve.gov/newsevents/ crunch/ another(prenominal)/20110110a.htmPress Release. (2012, Jan uary 11). Retrieved May 23, 2012, from Board of Governors of the Federal Reserve System http//www.federalreserve.gov/newsevents/press/other/20120110a.htm(1914). The Federal Reserve Act of 1913. In O. Sprague, The Quarterly diary of Economics, Vol. 28 No. 2 (pp. 213-254). Oxford University Press.The Budgetary Impact and Subsidy be of the Federal Reserves Actions During the Financial Crisis. (n.d.). Retrieved May 21, 2012, from CBO http//www.cbo.gov/publication/21491Who are the members of the Federal Reserve Board, and how are they selected? (n.d.). Retrieved May 21, 2012, from Board of Governors of the Federal Reserve System http//www.federalreserve.gov/faqs/about_12591.htm