The Federal Reserve System, referred to as the Federal Reserve or the Fed, is the United States of America’s central banking system.
On December 23, 1913, the Federal Reserve Act created the system after a series of financial shocks caused the need for central control of monetary policy to prevent future crises.
The Federal Reserve System is the United States central bank. It performs five functions to promote the US economy’s effective operation and protect its interest.
- The Fed governs the nation’s monetary policy to encourage maximum employment and price stability, while controlling interest rates and inflation in the US economy
- The Fed promotes financial stability and seeks to control and contain risks by active monitoring and engagement in the US and overseas
- It underpins the safety and compliance of financial institutions while monitoring their financial system’s impact
- It harnesses payments and settlements safety and efficiency through services to the banking industry and the US government
- The Fed promotes both consumer protection and community development through supervision and examination, and the administration of consumer laws and regulations