Free research paper sample on Federal Reserve:
Ever since the creation of the Federal Reserve System in 1913 by Congress, there has been debate on whether or not the Federal Reserve had to much power. Today the debate is still on going. Through out the life of the Federal Reserve there has been fact and fiction that shows it might have a lot of power. Some reasons that people believe that the Federal Reserve is too powerful is all the myths that the people believe. One is that the Federal Reserve assassinated president John F. Kennedy and that the Federal Reserve is just a privately owned bank put out there to take the taxpayers money. No matter what the Federal Reserve is thought to have involvement in, the question is still out there.
It is commonly known as the Fed. A central bank is the banker to both the banking community and the government. The Federal Reserve also issues the national currency, conducts monetary policy, and plays a major role in the supervision and regulation of banks and bank holding companies. The system was started when the Federal Reserve Act of 1913 was enabled. The 1913 act established a seven-member Federal Reserve Board, consisting of five presidential appointees, plus the secretary of the treasury and the Comptroller of the Currency.
In the United States, these roles are the responsibilities of officials of the Federal Reserve System. The Board of Governors and the top officers of the 12 district Federal Reserve banks are the main officials of the Fed. The Board of Governors is located in Washington D.C. and the top officers of the 12 district banks are located throughout the nation in the 12 known districts. The 12 districts each have a main Reserve Bank, which is located in their own district. They are known as directors and control the discount rate.
The Federal Reserve’s basic powers involve the Board of Governors, which controls policy issues concerning bank regulation. The Fed’s actions have a significant effect on United States interest rates and on stock, bond, and other financial markets. The Fed controls the interest rates by “loosening” or “tightening” the money supply. Some people consider The Federal Reserve, a fourth branch of the United States government because it is made up of a powerful group of national policymakers. These policymakers are free from the usual restrictions of governmental checks and balances. The Federal Reserve is relatively free from political pressures, but it must report frequently to the Congress on the conduct of monetary policy. This freedom gives the Federal Reserve a lot more power than any other agency. This freedom is a large part of the reason why people are against the Fed.
The Federal Reserve doesn’t have complete authority all the time. The United States banking system is very complex. The authority of the Federal Reserve is shared in some places. For example, in mergers or the examination of banks with other federal agencies like the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC), the Reserve works with those regulatory agencies to review the banks every year. In the critical area of regulating the nation’s money supply in agreement with national economic goals, the Federal Reserve is independent within the government.
Many people wonder why the Federal Reserve was created. Before the Federal Reserve was created the economy would surge and then there would be an economic crises that would interrupt the growth. There was no regulation and the monetary system was very fragile. The United States banking system was unable to respond to the flexibility of the business cycle. The banking system was very unregulated. The Federal Reserve is responsible for the maintenance of monetary and credit conditions to keep a sound business activity in all fields, such as agricultural, industrial, and commercial. So, the Federal Reserve Act of 1913 was enabled and this gave the country a lot more stability when it needed it most.
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