Who is the Federal Reserve?

The Federal Reserve System or the Fed is the central bank of the United States of America. The Fed was formed on December 23, 1913 by the US Congress of the time with the enactment of the Federal Reserve Act. It was created primarily as a response to the consecutive financial panics that hit the US economy over the course of the last century.

The objectives of the Federal Reserve may be generally divided into four sections.

1) Administration of monetary policy through the manipulation of economic facets using monetary and credit conditions. This, in turn, will guarantee maximum employment, stable prices, and moderately longer interest rates.

2) Management of existing financial institutions to set security standards for the financial system in the country and protection of credit rights.

3) Preservation of financial system stability and  limitation of systematic risk involved.

4) Provision of financial services for  the US government, depository institutions, and foreign official institutions. Their responsibilities include the supervision of operations of the national payments system.

The current chair of Fed is Janet Yellen. She heads the central bank including the twelve regional Federal Reserve Banks scattered across major cities throughout the US: Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, New York, Philadelphia, Richmond, San Francisco, and St. Louis.

It is one of the most important banks of the world and one of the most influential.