A quick history of the Federal Reserve and overview of what it does.
Please refer to our transcription below if it is easier and/or more convenient for you:
In 1913, after a hardly contested debate, President Woodrow Wilson signed into law the Federal Reserve Act creating the nation’s central bank, but the Federal Reserve Act wasn’t our country’s first attempt at central banking.
The first bank of the United States was created by Congress in 1791 at the urging of then treasury secretary Alexander Hamilton. Backlash was heavy and once the first bank’s 20 year charter expired, it wasn’t renewed.
The second bank of the United States was established a few years later, but once again its charter wasn’t renewed. Today, the Federal Reserve has four main responsibilities:
- Run monetary policy by influencing money and credit in pursuit of full employment and stable prices,
- Oversee of financial firms to ensure the safety and soundness of the banking and financial systems,
- Maintain stability in the financial system and financial markets,
- Provide financial services to the U.S. government, financial firms, and foreign officials.
Such a powerful agency could never avoid criticism however. Criticism ranges from lack of transparency to managing a currency that is not backed by any precious metal.
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