Did you know that the Federal Reserve Act was not the nation’s first attempt at creating a central bank?
Today, the four main responsibilities of the Federal Reserve are to run monetary policy, oversee financial firms, maintain stability in the financial system and provide financial services.
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In 1913 President Woodrow Wilson signed the Federal Reserve Act. This created the nation’s central bank. But the Federal Reserve Act wasn’t our country’s first attempt at central banking. Congress created The First Bank of the United States in 1791. Treasury Secretary Alexander Hamilton created the First Bank of the United States. Backlash was heavy and once the First Bank’s 20-year charter expired, it wasn’t renewed. The Second Bank of the United States established a few years later. But one again, its charter wasn’t renewed. Today, the Federal Reserve has four main responsibilities. One responsibility is to run monetary policy by influencing money and credit. This is in pursuit of full employment and stable prices. The central bank oversee’s financial firms. This is to ensure the safety and soundness of the banking and financial systems. The central bank maintains stability in the financial system and financial markets. The central bank provides financial services to the US government, firms and officials. Such a powerful agency could never avoid criticism. People criticize the lack of transparency when managing the nation’s money. Call us today and let’s talk about how the current Fed policy might affect you.