when the federal reserve system was established in 1913 its main policy goal was
Federal Reserve System The Federal Reserve System (also known as the Federal Reserve or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of financial panics (particularly the panic of 1907) led to the desire for central control of the monetary system in order to alleviate financial crises.[list 1] Over the years, events such as the Great Depression in the 1930s and the Great Recession during the 2000s have led to the expansion of the roles and responsibilities of the Federal Reserve System.[4][9][10]
Federal Reserve Act The passing of the Federal Reserve act of 1913 carried implications both domestically and internationally for the United States economic system.[11] The absence of a central banking structure in the U.S. previous to this act left a financial essence that was characterized by immobile reserves and inelastic currency.[12] Creating the Federal Reserve gave the Federal Reserve control to regulate inflation, even though the government control over such powers would eventually lead to decisions that were controversial. Some of the most prominent implications include the internationalization of the U.S. Dollar as a global currency, the impact from the perception of the Central Bank structure as a public good by creating a system of financial stability (Parthemos 19-28), and the Impact of the Federal Reserve in response to economic panics.[13] The Federal Reserve Act also permitted national banks to make mortgage loans for farm land, which had not been permitted previously.[14]