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Information and Resources on the Federal Reserve System

Ever since the economy took a downturn a few years ago, a significant amount of attention and scrutiny has been placed on the U.S. Economy. A major component of the current economic system is that of the Federal Reserve System. In order to have a functioning knowledge of the economy and the current economic situation the United States currently finds itself, it is imperative that an understanding of the role played by the Federal Reserve System is established.

While the foundation for the modern Federal Reserve System, or Fed, was established approximately around 1913, the concept of central banking in the United States dates all the way back to the 18th century, with the creation of the First Bank of the United States. After a series of bank panics and economic crises from 1873 to 1907, it became apparent that the only way for the country to achieve any kind of financial stability would be to heavily reform the currency and banking systems. The following years, particularly 1912 and 1913, would produce much debate between Democrats and Republicans regarding the specifics of the reforms to the then current banking system. The new system would be signed into law under the Federal Reserve Act on December 23rd, 1913. As a result of the compromises made by both Democrats and Republicans, the product of the Federal Reserve act was a decentralized bank that balanced the competing interests of private banks and the populist sentiment. For more information on the history of the Federal Reserve System, FED101 provides a closer look on its history and evolution.

In its current state, the Federal Reserve is comprised of three main branches: the Board of Governors, the Reserve Banks, and the Federal Open Market Committee. There are three main responsibilities that the Fed aims to accomplish.

The first of these goals is to conduct monetary policy. Through its influence on the nation’s supply of money and credit through monetary policy, the Fed is able to maintain price stability and sustain economic growth. To this end, the Federal Open Market Committee establishes the goals of the monetary policy, and is responsible for evaluating its impact of its policies on the national economy. Research economists at the Board of Governors and each of the twelve Reserve Banks contribute to the policy making process.

The second goal of the Federal Reserve is to ensure that the national banking system is safe and has the proper competitive practices in place. To this end, Congress has given the Federal Reserve the authority to conduct key functions towards the fulfillment of this goal. The Board of Governors is responsible for providing a clear definition of acceptable behavior for financial institutions, while the Reserve Banks enforce these rules and definitions on the financial institutions. In practice, the Fed creates and enforces these rules and guidelines in order to establish safe banking practices, protect consumers in financial transactions, and ensure the stability of U.S. financial markets.

The third goal of the Federal Reserve is to facilitate efficient and safe means of transferring funds throughout the banking system. In addition, the Fed is responsible for promoting technological advancements to help improve the payments system. Each of the twelve Federal Banks is primarily responsible for fulfilling these goals. Some of the actions taken by the Federal Banks include providing electronic payment services that transfer funds among financial institutions electronically, provide a nationwide network designed to exchange paperless payments among financial institutions and government agencies, maintain accounts for the United States Treasury, process government checks, and collect federal tax deposits.

All of these details and definitions regarding the Federal Reserve System, along with much more additional information, are available through the Functions page of the FED101 information site. You can find current information on the recent activities and actions of the Federal Reserve, as well as transcripts and videos of speeches and testimony, from the Board of Governors of the Federal Reserve System News and Events. For information on the Federal Reserve from a statistical and historical perspective, you can visit their site containing Statistics and Historical Data . You can also get detailed information on the twelve Federal Reserve Banks and an outline of their districts from the Twelve Federal Reserve Districts. The Federal Reserve Education page has a collection of publications and videos, online learning tutorials, Federal Reserve websites, resources and research links to help you become knowledgeable of the Federal Reserve System.

The United States Senate Committee on Banking, Housing, and Urban Affairs has various documents and video coverage of the recent hearings for the reappointment of Ben Bernanke to be Chairman of the Board of Governors of the Federal Reserve System. Among the documents posted on their site include a Statement from Senator Tim Johnson from the December 3rd hearing, the Statement by Ben S. Bernanke before the Committee on Banking, Housing, and Urban Affairs, and an archive of the webcast from the December 3rd hearing.

University Libraries are another source of information about the Federal Reserve. The following are a sample of the many books that discuss the Federal Reserve System:

Axilrod, S. H. Inside the Fed: Monetary Policy and Its Management, Martin through Greenspan to Bernanke. Cambridge, Mass.: MIT, 2009
University Library / HG 501 A95 2009

Cassidy, John. How Markets Fail: the Logic of Economic Calamities. New York: Farrar, Straus and Giroux, 2009
University Library / HB 3722 C37 2009

Harris, Ethan S. Ben Bernanke's Fed: the Federal Reserve after Greenspan. Boston, Mass.: Harvard Business, 2008
University Library / HG 2563 H34 2008

Shull, Bernard. The Fourth Branch: the Federal Reserve's Unlikely Rise to Power and Influence. Westport, Conn.: Praeger, 2005
University Library / HG 2563 S58 2005

If you have any questions or need assistance with research on this or any related topic, please contact Richard Irving, our Bibliographer for Political Science, Public Administration & Policy, and Law. He can be reach by email at :rirving@uamail.albany.edu or by calling 442-3698.

Blog post created by Matthew Laudicina