The Federal Reserve (the “Fed”) is the nation’s central bank. A quasi-public institution founded by the U.S. government, the Fed wields enormous power over the financial system and the economy of the United States. Consisting of a dozen regional banks and led by a presidentially-appointed board, the Fed makes decisions that can raise or lower interest rates, increase or decrease the money supply and regulate the activities of banks and other financial institutions, among other things. Since its founding in the early 20th Century, the Fed has been scrutinized for its many controversial decisions. During its early years, it was faulted for not doing more to prevent the Great Depression of the 1930s. In 2008, the Fed has made several controversial decisions as the nation’s struggles with the greatest threat to the U.S. financial system since the Stock Market crash of 1929. The Fed has moved to prevent certain major financial institutions from going bankrupt, while allowing others to falter and be sold to rivals. Perspectives on the Federal Reserve range from helping it grow even more powerful to abolishing it altogether.
The United States’ first paper currency was known as “continentals,” printed to finance the American Revolution. The currency was printed in such quantities that it led to inflation, and the American people soon lost faith in the notes.
The Federal Reserve is a government-created banking system that wields enormous power over the financial system and economy of the United States. Sometimes thought of as a central or “national bank” (due to previous government-created institutions that held such a name), the Federal Reserve (or “Fed”) makes important decisions involving government securities and interest rates that affect private banks as well as other financial institutions on Wall Street. By affecting interest rates, the Fed can manipulate billions of dollars in business profits or losses and millions in worker employment and stock, bond or bank account values.
Neither the Federal Reserve nor its Board of Governors provides information to the federal web site, USAspending.gov, regarding contractors for goods or services. The banking system does contract out, however, for help.
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Charles S. Hamlin Aug. 10, 1914-Aug. 9, 1916