Federal Reserve System

The purpose of the Federal Reserve System (The Fed) is to ensure stability in the banking system and to keep short-run political pressures out of monetary policy. The Federal Reserve System was created by the U.S. Congress (The Federal Reserve Act at ch. 6, 38 Stat. 251; 12 U.S.C. ch. 3) and signed into law by President Woodrow Wilson on December 23, 1913, following a series of bank panics years earlier. As the central bank of the United States of America, the Federal Reserve System was granted the legal authority to issue Federal Reserve Notes and Federal Reserve Bank Notes as legal tender. In subsequent statutes, Congress refined The Fed’s purpose to include enabling economic growth consistent with the U.S. economy’s potential, a high level ...