MENU
EDU Articles

Learn about investing, trading, retirement, banking, personal finance and more.

Ad is loading...
Help CenterFree ProductsPremium Products
IntroductionMarket AbbreviationsStock Market StatisticsThinking about Your Financial FutureSearch for AdvisorsFinancial CalculatorsFinancial MediaFederal Agencies and Programs
Investment PortfoliosModern Portfolio TheoriesInvestment StrategyPractical Portfolio Management InfoDiversificationRatingsActivities AbroadTrading Markets
Investment Terminology and InstrumentsBasicsInvestment TerminologyTradingBondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and TradingAnalysis BasicsTechnical IndicatorsTrading ModelsPatternsTrading OptionsTrading ForexTrading CommoditiesSpeculative Investments
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
RetirementSocial Security BenefitsLong-Term Care InsuranceGeneral Retirement InfoHealth InsuranceMedicare and MedicaidLife InsuranceWills and Trusts
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What is the Federal Reserve System?

The Federal Reserve System was established by the Federal Reserve Act of 1913, which created a network of reserve banks that could help to prevent economic meltdowns by serving as a regulator and a source of funds.

There are 12 regional Federal Reserve Banks which monitor banks in their jurisdiction and make loans when necessary. The Federal Reserve System is sometimes referred to as one bank, but it is in fact a network of 12 banks with 24 branches, overseen by a Board with members nominated by the US Government.

The Fed, as it’s known, is meant to regulate financial instruments traded between banking institutions, to protect consumers and the economy, to assist the government and its member banks with liquidity needs and helping to control the money supply and inflation as well as interest rates.

The Fed is the Central Bank of the United States, but unlike most other central banks, it is not technically part of the government. By helping to determine the interest rate environment, it creates “tight” and “loose” monetary environments which can have a stabilizing or throttling effect on the economy and its banking institutions.

It performs stress tests on banks to ensure that they have enough capital, and it plays a role in the FDIC and international banking regulations and record-keeping.

What is the Federal Reserve Bank?
How Many Dollars do We Have in Circulation?

Ad is loading...